EXOHAKOT? 

APR    9    1919 


UC-NRLF 


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REPORT 


OF  THE 


MICHIGAN  BUDGET  COMMISSION 
OF  INQUIRY 


1918 


EXCHANGE 


REPORT 


OF  THE 


Michigan  Budget  Commission 

v 

of  Inquiry 


1918 


FORT    WAYNE    PRINTING    COMPANY 

CONTRACTORS    FOR    MICHIGAN    STATE    PRINTING    AND     BINDING 

FORT    WAYNE.    INDIANA 

1918 


REPORT  OF  THE  MICHIGAN  BUDGET  COMMISSION 
OF  INQUIRY 

Lansing,  Michigan,  October  1st,  1918. 
Hon.  Albert  E.  Sleeper,  Governor  of  Michigan. 

Sir : — In  accordance  with  the  requirements  of  act  one  hundred  ninety- 
three,  public  acts  of  nineteen  hundred  seventeen,  the  following  report  of 
the  Michigan  Budget  Commission  of  Inquiry  is  respectfully  submitted  to 
you: 

Organization  of  the  Commission: 

Following  your  appointment  of  the  commission  and  pursuant  to  your 
call,  the  commission,  consisting  of  Joseph  W.  O'Brien  of  Grand  Haven, 
Charles  D.  Thompson  of  Bad  Axe,  Dana  H.  Hinkley  of  Petoskey,  O.  C. 
Tompkins  of  Lansing,  and  George  Lord  of  Detroit,  met  with  you  and 
Auditor  General  Fuller,  ex-officio  members,  at  the  state  capitol  on  July 
llth,  1917,  and  formally  organized  by  electing  yourself  Chairman ;  Com- 
missioner C.  D.  Thompson,  Vice-Chairman,  and  Commissioner  George 
Lord,  Secretary.  Your  designation  of  Commissioner  Thompson  as 
special  investigator  was  later  confirmed  by  the  commission. 

Powers  and  Duties: 

As  expressed  in  the  title  of  the  creative  statute,  the  commission  was 
created  "to  investigate  and  report  upon  the  general  financial  system  of 
this  state  insofar  as  it  relates  to  the  appropriation,  control  and  expendi- 
ture of  moneys  for  the  support  of  state  departments,  boards,  commis- 
sions and  offices,  and  to  investigate,  report  upon,  and  recommend  legis- 
lation necessary  to  establish  a  budget  system." 

The  act  charges  the  commission  with  the  duty  of  making  a  thorough 
survey  and  investigation  of  the  financial  system  of  the  state  and  of  the 
general  affairs  of  the  several  activities  of  the  state  government,  for  the 
purpose  of  ascertaining  facts  relative  to  the  business  and  financial  admin- 
istration and  the  degree  of  efficiency  and  economy  maintained  in  the 
expenditure  of  moneys  appropriated;  of  investigating  and  ascertaining 
the  facts  relative  to  the  present  method  of  appropriating  money;  of 
examining  the  budget  laws  of  other  states,  their  operation  and  results 
obtained,  and  of  gathering  and  compiling  such  information  as  may  be 
necessary  to  enable  the  commission  to  formulate  a  comprehensive  budget 
system  for  the  state.  It  is  also  charged  with  the  duty  of  drafting  appro- 
priate bills  for  legislative  consideration,  embodying  such  changes  in  the 
present  laws  as  may  be  necessary  to  bring  about  the  most  efficient  and 
economical  correlation,  control  and  management  of  the  several  activities 
of  the  state  government,  and  the  expenditure  of  public  funds;  also  a 
bill,  or  bills,  providing  for  the  regulation  and  control  of  the  appropriation 
of  moneys  by  an  adequate  budget  system.  A  further  duty  imposed  on 
the  commission  is  that  of  causing  an  examination  to  be  made,  by  its  spe- 
cial investigator,  of  each  state  department,  institution,  board,  commis- 
sion and  office  for  the  purpose  of  ascertaining  their  respective  financial 

677379 


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needs  and  estimated  income  for  the  next  biennial  period,  and  of  making 
an  estimate  and  compilation  thereof  from  which  a  budget  must  be  pre- 
pared for  presentation  to  the  next  legislature. 

There  are  forty-three  active  state  departments,  boards  and  commis- 
sions and  twenty-five  state  institutions.  To  visit  and  investigate  the 
general  affairs  of  .each  of  these  units  of  the  state  government,  in  addi- 
tion to  the  other  duties  imposed  upon  the  commission,  was  found  to  be 
physically  impossible  of  accomplishment  within  the  time  limit  prescribed 
by  the  statute,  namely,  January  first,  nineteen  hundred  eighteen.  The 
commission  suggested,  therefore,  in  order  that  no  part  of  the  work  be 
left  undone,  that  the  services  of  the  special  investigator  and  the  secretary 
be  continued  until  such  time  as  the  requirements  of  the  statute  be  car- 
ried out.  In  accordance  with  this  suggestion  of  the  commission,  and 
acting  under  authority  vested  in  you  by  law,  you  designated  Special 
Investigator  Thompson  and  Secretary  Lord  to  continue  their  respective 
duties  until  the  statutory  requirements  be  fully  complied  with.  The 
result  of  all  this  work  is  as  herein  set  forth. 


WHY  A  BUDGET  SYSTEM? 

That  question  can  best  be  answered  by  briefly  stating  the  present  sys- 
tem of  appropriating  public  revenues,  the  manner  of  controlling  moneys 
appropriated  and  the  method  of  their  disbursement.  Also,  by  way  of 
comparison,  the  system  that  would  prevail  under  adequate  budgetary 
procedure. 

As  a  general  rule,  appropriation  bills,  under  our  present  system,  are 
prepared  by  the  departments,  institutions  and  offices  requesting  money 
and,  in  the  case  of  institutions,  are  usually  introduced  in  the  legislature 
by  the  members  representing  the  localities  in  which  the  institutions  are 
located.  Because  of  local  pride  and  the  possibility  of  added  political 
prestige,  it  is  only  reasonable  to  assume  that  these  members  of  the  legis- 
lature will  make  every  effort  to  get  as  much  money  as  possible  for  their 
respective  institutions,  to  the  extent  of  the  amounts  requested  in  the 
appropriation  bills,  and  this  irrespective  of  whether  they  have  ascer- 
tained, with  a  reasonable  degree  of  certainty,  that  the  amounts  requested 
are  actually  needed  and  are  essential  to  the  public  good.  Their  knowledge 
of  the  financial  needs  is  usually  based  on  what  the  executive  heads  of 
the  institutions  tell  them  rather  than  on  personal  investigation.  This 
criticism  is  also  applicable  to  the  other  state  activities  seeking  appropria- 
tions, the  bill  for  each  of  which  is  usually  introduced  by  some  member  at 
the  request  of  the  executive  head  of  the  department  or  office  requesting 
the  appropriation,  and  the  only  information  he  gets  as  to  the  necessity  for 
the  appropriation  requested  is  the  information  furnished  him  by  the 
department  or  office  affected.  He  is  not  furnished  with  adequate  infor- 
mation resulting  from  a  proper  investigation  of  financial  needs,  nor  with 
a  comparative  statement  of  past  expenditures  with  amounts  requested 
for  the  same  activity,  essential  to  his  intelligent  understanding  of  the 
measure  he  is  advocating  and  to  the  economic  conduct  of  governmental 
activities. 

Appropriation  bills,  upon  their  introduction,  are  first  referred  to  the 
standing  committees  on  the  institutions,  or  other  state  activities,  they 


5 

cover.  Preliminary  to  the  consideration  of  an  appropriation  for  a  state 
institution,  the  committee  usually  visits  the  institution  and,  in  a  sort 
of  a  perfunctory  way,  endeavors  to  find  out  something  as  to  what  the 
financial  needs  of  the  institution  are.  As  a  usual  thing,  the  time  'spent 
by  the  committee  at  the  institution  is  wholly  inadequate  for  getting  any- 
thing but  meager  information,  and  most  of  that  is  furnished  by  the  execu- 
tive officer  of  the  institution.  Furthermore,  the  members  of  the  com- 
mittee are  not  usually  men  who  have  made  a  study  of  state  governmental 
business  and  financial  affairs.  It  should  not  be  expected,  therefore,  that 
they  gain  very  much  knowledge  as  to  actual  conditions,  other  than  what 
they  are  told,  by  a  few  hours'  visitation.  They  undoubtedly  do  the  best 
they  can  in  the  limited  time  they  can  spend  at  the  institution  and,  gen- 
erally, are  honest  and  conscientious  in  their  endeavors.  The  fault,  then, 
is  with  the  system. 

When  the  appropriation  bills  are  reported  out  by  the  standing  com- 
mittees they  are  immediately  referred  to  the  committee  on  ways  and 
means,  or  finance,  where  they  rest,  with  few  exceptions,  until  the  closing 
days  of  the  legislative  session.  When  those  committees  get  through  with 
their  pruning  to  a  point  where  they  are  quite  sure  that  the  total  of  all 
the  appropriation  bills  does  not  exceed  the  aggregate  amount  which  the 
administration  agrees  shall  be  the  maximum  cost  of  the  state  govern- 
ment for  the  next  biennium,  the  bills  are  reported  out  and  are  usually 
enacted  as  reported,  without  change  and  with  but  little,  if  any,  discus- 
sion. The  reason  for  the  apparent  "smooth  sailing"  of  appropriation 
bills  after  being  reported  out  by  the  finance  committees  is  that  the  mem- 
bers of  the  legislature,  other  than  the  members  of  the  committees  to 
whom  appropriation  bills  are  referred,  are  not  furnished  with  any  infor- 
mation as  to  the  actual  necessity  for  the  amounts  of  money  called  for, 
neither  are  they  afforded  the  adequate  means  for  consideration  of  appro- 
priation items,  essential  to  effective  criticism  and  to  an  intelligent  vote 
thereon.  Furthermore,  under  the  present  system,  the  general  public 
who  is  called  upon  to  "foot  the  bill"  gets  no  information  relative  to  the 
financial  program  until  the  closing  days  of  the  session  and  then  about 
all  the  information  the  public  gets  is  that  a  certain  amount  of  money 
was  appropriated  for  certain  activities.  There  being  practically  no  pub- 
licity of  the  items  of  appropriation  measures  and  the  necessity  therefor, 
at  least,  before  they  are  enacted  into  law,  the  general  public  is  deprived 
of  the  opportunity  it  should  have  of  criticising  any  part  of  the  financial 
program  or  of  offering  suggestions  concerning  it.  Hence  the  term, 
"Invisible  government." 

During  each  regular  session  of  the  legislature,  there  are  from  fifty  to 
seventy-five  appropriation  measures  enacted  into  laws.  At  the  last  ses- 
sion there  were  over  eighty  such  laws  enacted.  Few  of  those  measures 
are  given  sufficient  publicity  as  to  their  necessity,  previous  to  their  enact- 
ment, and  the  discussions  concerning  them  are  usually  heard  behind  the 
closed  doors  of  the  committee  room,  wherein  is  generally  found  only 
those  advocates  directly  interested  in  getting  all  the  money  they  can  for 
the  particular  activities  of  the  state  government  they  represent.  We 
dare  say  that  not  one-sixteenth  of  one  per  cent  of  the  general  public 
have  any  knowledge  of  what  those  appropriation  measures  contain  pre- 
vious to  their  enactment,  and  only  slight  knowledge  thereafter.  The 
reason  is  the  miserable  unbusiness-like  system  we  have  of  financing  the 


6 

state  government.  Under  its  operation,  the  people  are  afforded  prac- 
tically no  opportunity  for  gaining  the  knowledge  concerning  proposed 
appropriations  essential  to  an  intelligent  understanding  of  actual  finan- 
cial needs. 

One  of  the  weakest  and  most  unsatisfactory  features  of  our  present 
fiscal  system  is  the  manner  in  which  many  of  our  governmental  activities 
are  financed  from  the  general  fund.  This  fund  is  provided  for  by  what 
is  known  as  the  "General  Purpose  Bill"  and  is  augmented  by  certain 
revenues  derived  from  sources  other  than  direct  taxation.  It  is  from 
this  fund  that  the  ordinary  expenses  of  the  state  government,  such  as 
departmental  salaries  and  expenses,  salaries  and  expenses  of  the  judi- 
ciary, legislative  expenses,  etc.,  are  paid.  The  general  purpose  bill, 
enacted  by  the  last  legislature,  appropriated  money  for  seventy-eight 
distinct  purposes  without  naming  them  in  the  bill.  There  was  no  itemi- 
zation  of  contemplated  expenditures  under  these  appropriations  fur- 
nished the  legislature  so  that  it  could  act  intelligently  in  regard  to  them, 
everything  being  done  by  the  lump-sum  method.  The  total  of  the  general 
purpose  bill  for  the  biennial  period  of  1917-1918  amounted  to  $2,898,- 
305.00,  for  which  a  direct  tax  was  levied  on  the  general  properties  of 
the  state,  $1,575,480.00  of  which  amount  was  levied  in  1917  and 
$1,322,825.00  in  1918.  These  two  amounts  were  appropriated  in  lump 
sums  with  the  appropriating  body,  other  than  the  members  of  the  finance 
committees,  having  only  meager  knowledge  as  to  the  actual  necessity 
therefor  or  the  purposes  for  which  the  money  is  to  be  expended.  Further- 
more, under  this  system  of  appropriating  and  spending  the  people's 
money,  the  general  public  gets  very  little  information  concerning  the 
fiscal  activities  covered  by  the  general  fund.  This  condition  of  our  fiscal 
affairs  ought  not  to  be.  The  people  have  a  right  to  know,  and  they 
should  be  furnished  the  means  of  knowing,  in  detail,  the  purposes  of 
proposed  expenditures  before  they  are  authorized,  so  that  they  may  be 
able,  through  their  representatives  in  the  legislature,  to  effectively  control 
the  public  purse.  The  general  fund  as  at  present  constituted  and  con- 
trolled is  the  official  money  grab-bag  of  the  state.  It  has  been  a  common 
practice  for  various  functionaries  to  present  money  bills  to  the  legislature 
without  any  tax  clause  so  that  the  disbursement  might  be  made  from 
the  general  fund  and  thus  smother  opportunity  for  the  public  to  readily 
ascertain  actual  cost  of  operation.  Furthermore,  some  of  the  depart- 
ments receiving  appropriations  for  their  support  also  draw  upon  the 
general  fund  for  a  part  of  their  expenses,  thus  making  it  exceedingly 
difficult  for  the  general  public  to  ascertain  what  the  total  expense  of 
conducting  such  departments  is.  The  present  methods  of  appropriating 
to,  and  disbursing  from,  the  general  fund  were  wrong  in  their  concep- 
tion, promote  waste  and  extravagance,  and  breed  inefficiency  in  the 
conduct  of  the  government.  It  is  no  wonder,  therefore,  that  there  has 
developed  during  recent  years  a  strong  public  sentiment  for  a  change  in 
our  financial  methods  by  way  of  a  comprehensive  budget  system. 

Publicity  being  the  keynote  of  a  well  constructed  budget  system  of 
ascertaining  the  financial  needs  of  government  and  of  appropriating  and 
controlling  public  moneys,  "invisible  government"  under  its  operation 
cannot  exist.  The  general  public  will  know  the  whys  and  the  wherefores 
of  all  demands  on  the  public  treasury  as  soon  as  the  legislature  convenes 
in  session,  as  will  also  each  member  of  the  legislature.  There  will  no 


longer  be  good  reason  for  public  criticism  of  state  governmental  costs, 
because  the  people  will  be  afforded  ample  opportunity  for  examination 
and  study  of  budget  estimates,  enabling  them  to  intelligently  express 
their  opinion  concerning  them  and,  through  their  representatives  in 
the  legislature,  to  effect  a  much  more  efficient  control  over  the  public 
purse. 

Under  the  budget  system,  money  will  be  appropriated  by  definite  and 
comprehensible  segregation  according  to  governmental  functions  and 
objects  of  expenditures.  Appropriations  will  not  be  made  largely  upon 
guesswork,  as  at  present,  but  upon  the  actual  needs  of  each  activity  of 
the  government  determined  by  expert  investigations,  followed  by  care- 
fully prepared  comparative  data  in  relation  thereto. 

The  plan  is  to  require  each  institution,  department  and  office  of  the 
state  government  to  furnish  on  appropriate  forms,  which  will  be  sent  to 
them,  a  detailed  estimate  of  financial  needs  for  the  ensuing  biennial 
fiscal  period,  together  with  anticipated  income;  also,  for  comparative 
purposes,  a  detailed  statement  of  past  expenditures  and  income,  and  of 
its  present  financial  condition.  These  estimates  of  financial  needs  will 
be  subject  to  revision  by  a  centralized  authority,  and,  before  final  action 
is  taken,  there  will  be  public  hearings  in  regard  to  them.  Following 
final  revision,  a  statement,  or  budget,  will  be  prepared  showing  the 
estimated  amounts  required  for  the  conduct  of  the  state  government  in 
all  its  departments,  institutions,  boards,  commissions  and  offices  for 
each  year  of  the  biennial  fiscal  period  next  ensuing;  an  estimate  of  the 
revenues  of  the  state,  and  the  sources  thereof,  for  the  same  period;  the 
expenditures,  including  bills  due  and  unpaid,  and  revenues  during  the 
first  year  of  the  current  biennial  fiscal  period  and  also  for  each  year  of 
the  next  preceding  biennial  fiscal  period;  an  estimate  of  the  amount 
needed  for  emergency  purposes,  the  amount  needed  to  pay  and  discharge 
such  principal  and  interest  of  the  state  debt  as  may  become  due,  together 
with  such  other  data  relating  to  fiscal  conditions  as  will  serve  to  furnish 
the  legislature  and  the  general  public  with  a  complete  understandable 
statement  of  the  actual  financial  needs  of  our  state  government  in  all  of 
its  activities,  and  of  its  present  financial  condition. 

The  books  and  accounts,  and  the  general  affairs,  of  each  state  depart- 
ment, institution,  board,  commission  and  office  will  be  subject  to  exami- 
nation at  any  time  for  the  purpose  of  ascertaining  facts  relating  to  the 
budget,  and  for  the  purpose  of  making  recommendations  to  the  legislature 
relative  to  the  degree  of  efficiency  and  economy  in  which  they  are  being 
conducted. 

The  cash  receipts  of  all  branches  of  the  state  government,  from  what- 
ever source  derived,  will  be  required  to  be  turned  into  the  state  treasury 
on  or  before  the  first  day  of  each  month  following  receipt  or  collection. 
Exceptions  will  have  to  be  made  in  the  case  of  certain  revenues  derived 
by  two  or  three  of  our  educational  institutions  from  sources  other  than 
from  specific  appropriations,  over  which  revenues,  because  of  constitu- 
tional inhibition  and  federal  grants,  the  state  has  limited  control. 

No  money  will  be  disbursed  from  the  state  treasury  unless  specifically 
authorized  by  law,  and  then  only  upon  warrant  of  the  Auditor  General, 
for  the  purpose,  or  purposes,  named  in  the  governing  statute.  Further- 
more, no  money  will  be  disbursed  from  the  state  treasury  in  excess  of 
the  amount  appropriated  for  each  activity  of  the  state  government,  and 


no  money  appropriated  for  a  specific  purpose  will  be  permitted  to  he 
transferred  and  used  for  any  other  purpose  without  the  written  approval 
of  the  budget  commission. 

State  institutions  will  not  be  permitted  to  draw  large  sums  from 
state  treasury,  not  necessary  for  their  immediate  needs,  and  deposit  the 
money  in  local  banks,  some  of  which  draws  interest  and  some  does  not. 
Whenever  a  state  institution  shall  be  in  need  of  funds,  it  will  be  required 
to  make  request  therefor  to  the  Auditor  General,  who,  if  satisfactory 
showing  is  made  that  the  funds  requested  are  actually  needed,  will  draw 
his  warrant  for  the  amount  requested,  which  amount  will  then  be  credited 
to  the  appropriation  account  of  the  institution  making  the  request.  The 
amount  so  credited  will  then  be  subject  to  withdrawal  from  the  state 
treasury  by  appropriate  voucher  checks  signed  by  the  executive  officer, 
or  officers, "of  the  institution.  All  funds  so  drawn  must  be  used  strictly 
for  the  purpose,  or  purposes,  for  which  appropriated,  and  in  accordance 
with  the  requirements  of  the  accounting  laws  of  the  state.  Each  institu- 
tion will  be  permitted  to  establish  and  maintain  a  petty  cash  account 
to  the  extent  of  five  hundred  dollars,  and  no  more. 

It  is  pertinent  to  remark  that  on  the  first  day  of  October,  nineteen 
hundred  seventeen,  over  seven  hundred  thousand  dollars  of  state  funds 
were  in  the  hands  of  the  treasurers  of  the  various  state  institutions. 

It  will  readily  be  seen  that,  under  such  a  system  as  outlined,  not  only 
will  the  financial  needs  of  the  government  be  ascertained  by  scientific 
methods,  which  spell  accuracy,  but  the  revenues  of  the  state  will  be 
deposited  in  the  state  treasury  to  be  paid  out  only  in  pursuance  of 
appropriations  made  by  law,  and  in  such  amounts  as  may  be  actually 
needed,  from  time  to  time,  for  the  proper  conduct  of  the  several  activities 
of  the  state  government.  State  sub-treasuries  will  no  longer  exist.  There 
will  be  a  central  (state)  treasury  in  fact  as  well  as  in  name,  and  all 
financial  transactions  of  the  state  government  will  pass  through  the  state 
treasury  in  accordance  with  a  sound  business  practice. 

There  is  now  confusion  and  lack  of  uniformity,  and  of  modern  business 
methods,  in  the  manner  in  which  the  financial  business  of  the  state  is 
transacted,  resulting  in  the  door  being  left  open  to  governmental  dissi- 
pation. 

State  funds  are  often  drawn  from  the  state  treasury  in  large  amounts 
and  expended  in  contravention  of  a  sound  business  policy. 

Bills  for  expenses,  in  several  instances,  are  paid  directly  by  the  offices 
incurring  them  without  audit  by,  and  approval  of,  the  auditing  depart- 
ment of  the  state.  Some  offices  pay  their  expenses  from  fees  collected  and 
forward  unexpended  balances,  if  there  are  any,  to  the  state  treasury. 
Several  of  the  offices  collect  a  large  amount  of  fees  which  are  deposited 
to  their  credit  and  for  their  use.  Their  bills,  however,  go  through  the 
proper  channels  before  payment  requiring  the  approval  of  the  Auditor 
General  or  the  Board  of  State  Auditors.  At  least  one  state  commission 
draws  its  entire  appropriation  from  the  state  treasury  and  pays  its  own 
bills,  the  unexpended  balance,  if  any,  being  returned  to  the  state,  together 
with  a  report  of  expenditures,  at  the  end  of  each  year.  State  institutions 
pay  their  bills  directly  from  appropriated  funds  which  they  draw  period- 
ically from  the  state  treasury.  After  payment,  an  itemized  statement  of 
expenditures  is  sent  to  the  Auditor  General. 

One  of  the  principal  causes  of  the  growing  popular  sentiment  for  a 


change  from  our  present  loose  method  of  financing  our  state  government 
to  a  scientific  budget  system  is,  undoubtedly,  the  large  increase  in  the 
cost  of  our  state  government  during  the  last  decade.  During  that -period, 
our  tax  levies  have  been  increasing  by  leaps  and  bounds  until,  today, 
the  people  are  groaning  under  the  burden.  In  1908  our  tax  levy  for  state 
government  purposes  amounted  to  f  4,252,923.00,  and  this  year  (1918)  the 
levy  will  be  over  f 9,000,000.00,  an  increase  of  114  per  cent  for  the  ten- 
year  period.  This  is  a  much  larger  percentage  of  increase  than  we  have 
experienced  in  population,  or  in  wealth.  It  is  true  that  the  assessed 
valuation  of  the  state  increased  140  per  cent  during  the  ten-year  period 
ending  with  1917.  This  increase  in  assessed  valuation,  however,  does  not 
mean  that  there  has  been  a  similar  increase  in  taxable  wealth.  A  large 
portion  of  it  is  the  result  of  increases  in  the  percentages  of  assessments, 
rather  than  as  a  result  of  actual  increase  in  properties,  or  property 
values.  It  is  well  known  that  ten  years  ago  the  average  ratio  of  the 
assessed  value  of  the  general  properties  of  the  state  to  their  actual  value 
was  about  60  per  cent,  while  now  the  tax  commission  reports  that  assess- 
ments are  being  made  on  a  full  value  basis. 

Estimating  our  population  at  the  present  time  to  be  3,750,000 — and 
Michigan's  most  optimistic  dreamer  will  hardly  say  we  have  more  inhab- 
itants than  that — the  tax  per  capita  for  state  purposes  increased  59  per 
cent  during  the  last  ten  years,  the  state  tax  per  capita  being  $1.51  in 
1908  and  f  2.40  in  1918.  The  increase  in  population  during  the  same  period 
was  about  30  per  cent. 

It  should  be  said,  however,  that  the  principal  causes  of  this  increase 
in  the  cost  of  government  result  largely  from 

First,       The  increased  demands  of  the  people  for  new  things ; 

Second,     The  increased  costs  of  all  items  purchased  and  used  by  the  state  in 

the  conduct  of  its  business  ; 
Third,      The  natural  growth  of  the  state's  business  in  common   with   the 

growth  of  private  industries ;  and 
Fourth,     The  creation  of  new  institutions  and  new  offices  and  the  increasing 

of  the  powers  and  duties  of  the  old  offices. 

This  increase  in  the  cost  of  government,  however,  calls  for  a  revision 
of  our  financial  methods  and  the  highest  degree  of  efficiency  in  conducting 
the  business  of  government.  Governmental  costs  have  increased  so 
rapidly  during  the  last  decade  and  have  reached  to  such  an  amount  as 
to  stagger  those  who  have  to  bear  the  burden.  The  utmost  care  will  have 
to  be  exercised  and  improved  financial  methods  followed  in  the  conduct 
of  our  government,  if  we  hope  to  keep  our  future  expenditures  within  the 
limit  of  reasonable  taxation.  Waste  and  extravagance  must  be  prevented 
and  all  unnecessary  demands  upon  the  public  treasury  detected  and 
stopped. 

That  this  can  best  be  done  effectively  by  the  establishment  of  a  budget 
system  to  govern  our  fiscal  activities  is  beyond  question.  It  is  almost 
universally  recognized  that  a  budget  system  is  essential  to  efficient  and 
effective  administration  of  public  financial  activities.  Its  effect  would 
be  to  prevent  waste  and  extravagance,  to  stop  unnecessary  expenditures, 
to  give  the  fullest  publicity  to  all  our  fiscal  activities,  without  which 
publicity  there  can  be  nothing  like  an  adequate  public  control  over 
expenditures,  and  to  substitute  order  for  disorder  in  the  manner  of  financ- 
ing our  state  government.  In  every  country,  in  every  state,  and  in  every 


10 

municipality  having  a  budget  in  operation,  it  has  proven  to  be  the  most 
effective  agency  for  the  promotion  of  efficiency  and  economy  in  the 
conduct  of  government  and,  furthermore,  it  furnishes  the  people  the 
means  of  readily  ascertaining  what  has  been  accomplished  by  the  govern- 
ment for  money  spent  and  for  what  purposes  money  requested  for  the 
next  biennium  is  to  be  used.  Under  its  operation  public  servants  are 
forced  to  a  strict  accountability  of  their  stewardships.  As  well  said  by 
President  Taft's  commission  on  efficiency  and  economy,  "n  budget  is  an 
effective  means  whereby  the  government  may  be  kept  in  constant  adjust- 
ment with. the  welfare  needs  of  the  people;  a  means  whereby  the  economy 
and  efficiency  of  administration  may  be  regularly  brought  to  a  test." 

The  trend  everywhere  is  toward  scientific  budget  making  to  take  the 
place  of  the  "hit-and-missnmethod  of  appropriating  public  moneys  which, 
up  to  a  few  years  ago,  was  followed  in  nearly  all  the  states.  During  the 
last  decade  the  following  states  have  adopted  a  budget  system :  New 
York,  New  Jersey,  Connecticut,  Massachusetts,  Maine,  Vermont,  Ohio, 
Illinois,  Wisconsin,  Minnesota,  North  Dakota,  South  Dakota,  Iowa, 
Nebraska,  Oklahoma,  Utah,  Washington,  Oregon,  California,  Arizona, 
New  Mexico,  Texas,  Florida,  Virginia  and  Maryland.  In  none  of  these 
states  is  there  any  desire  to  return  to  the  old  system  of  financing  their 
respective  governments. 

Of  the  states  named,  the  commission  visited,  for  the  purpose  of  investi- 
gation and  study,  New  York,  Ohio,  Illinois,  Wisconsin  and  Maryland. 
These  particular  states  were  selected  either  because  of  the  special  pro- 
gress they  have  made  in  their  fiscal  organization  or  of  their  presenting 
problems  similar  to  those  in  our  own  state.  Visits  were  also  made  to 
the  city  of  Baltimore,  in  which  a  well  organized  budget  plan  is  in 
operation.  Much  valuable  information  was  gained  by  the  commission 
by  these  visitations,  not  only  at  the  time  of  the  visit,  but  also  subse- 
quently by  correspondence. 

Of  the  states  visited,  the  state  of  Illinois  has  gone  much  farther  in 
remodeling  its  administrative  system  of  government  than  any  other  state 
in  the  union.  The  change  in  the  state  administrative  system  in  the  state 
of  Illinois  came  about  primarily  as  a  result  of  an  exhaustive  survey  of  the 
state  government  made  by  a  very  able  commission.  The  Governor  of 
Illinois,  Honorable  Frank  O.  Lowden,  using  the  report  of  the  commission 
as  a  basis,  submitted  to  the  legislature  of  that  state  a  bill  providing  for 
a  new  civil  administrative  code  which  was  enacted  into  law.  Under  the 
provisions  of  this  law,  the  government  of  Illinois,  with  the  exception  of 
certain  temporary  boards  and  commissions  of  quasi-judicial  or  quasi- 
legislative  character,  has  been  consolidated  into  nine  divisions,  with  a 
director  at  the  head  of  each  division.  These  divisions  are  Finance,  Trade 
and  Commerce,  Public  Welfare,  Public  Works,  Labor,  Mines  and  Min- 
erals, Agriculture,  Public  Health,  and  Legislation  and  Administration. 
These  nine  divisions  do  the  work  now  which  formerly  was  done  by  some- 
thing like  one  hundred  and  twenty-five  independent  agencies  of  tlie  state 
government.  We  are  advised  by  the  administrative  officers  of  that  state 
that  the  new  system  is  proving  a  success. 

The  following  excerpts  relative  to  the  operation  of  the  budget  system 
in  some  of  the  states  named  may  be  of  interest : 

"Having  operated  the  state  financial  system  on  the  budget  plan  since  1913, 
I  do  not  know  how  we  could  properly  manage  without  it.     The  expenditures 


11 

of  the  state  are  placed  upon  a  scientific  basis,  through  which  untold  saving 
has  resulted  The  legislative  finance  committees  have  for  their  guidance 
the  carefully  estimated  needs  of  all  departments  before  any  appropriation  is 
made,  and  each  appropriation  is  made  for  a  specific  purpose.  Each  year 
indicates  refinements  to  the  system  now  employed.  At  the  last  session  of  the 
General  Assembly,  we  found  the  personal  presentation  of  the  state's  financial 
needs  a  most  helpful  thing."— Governor  James  M.  Cox,  Ohio. 

"The  budget  recommendations  of  the  State  Board  of  Control  and  the 
Controller,  presented  to  the  legislature,  as  a  study  of  the  needs  of  the  state 
departments  and  institutions,  have  been  of  benefit  in  that  they  present  figures 
founded  upon  necessity  and  eliminating  the  old  hit-and-miss  system  and  like- 
wise the  old  system  of  asking  for  an  appropriation  many  thousands  of  dollars 
in  excess  of  the  amount  hoped  to  be  received." — Marshall  DeMotts,  Chairman, 
State  Board  of  Control,  California. 

"It  would  be  a  long  story  to  tell  you  why  we  adopted  the  Executive  Budget 
System  for  Maryland.  Briefly,  we  found  that  a  budget  prepared  by  the 
Governor  after  hearing  from  the  different  departments  could  be  more  accu- 
rately and  expertly  prepared  than  one  which  is  hurriedly  prepared  by  a 
legislative  body.  It  has  worked  finely  in  Maryland."— Governor  Emerson  C. 
Harrington,  Maryland. 

"The  budget  act  here  was  adopted  because  of  the  realization  of  the  inade- 
quacy of  check  on  public  appropriations  and  expenditures  under  the  old 
system,  which  left  the  appropriation  bill  until  the  last  hour  of  the  legislative 
session  and  its  contents  unknown  to  any  but  a  few  members  of  the  legislature 
before  final  passage." — Governor  W.  E.  Lindsey,  New  Mexico. 

"The  first  budget  used  in  this  state  was  presented  to  the  legislature  of  1913. 
Prior  to  this  time  our  fiscal  affairs'  were  in  more  or  less  of  a  chaotic  state. 
In  many  instances  no  limits  were  placed  upon  the  amount  of  money  that 
departments  might  spend.  Appropriations  were  scattered  throughout  our 
statutes  and  session  laws.  Appropriations  were  even  duplicated,  departments 
having  as  many  as  three  appropriations  for  the  same  purpose. 

"The  budget  plan  has  put  the  entire  financial  affairs  of  the  state  of  Wis- 
consin upon  a  sound  business  basis.  It  enables  the  legislature  to  consider  a 
department's  needs  in  an  intelligent  way  and  requires  the  departments  to  pre- 
sent facts  to  back  up  their  budget  figures. 

"The  budget  system  has  also  done  away  with  departmental  lobbying.  In 
previous  years  during  the  legislative  session  departmental  work  was  more  or 
less  at  a  standstill  until  the  necessary  appropriation  measures  were  enacted. 
Now,  the  departments  pay  no  attention  to  the  working  of  the  legislature. 
They  are  called  before  the  Finance  Committee  when  their  budgets  are  con- 
sidered. After  the  Finance  Committee  has  passed  upon  these,  bills  take  the 
proper  course  in  the  legislature  and  require  no  departmental  watching. 

"Even  though  our  total  expenditures  have  increased  from  year  to  year, 
we  feel  that  the  budget  system  has  resulted  in  a  saving  of  money  to  the  people 
of  Wisconsin.  We  are  today  receiving  more  nearly  a  dollar's  worth  of  services 
or  supplies  for  every  dollar  expended  than  has  been  the  case  in  times  past." — 
Governor  E.  L.  Phillipp,  Wisconsin. 

"Personally,  I  believe  that  a  state  organization  ought  to  be  operated  under 
a  budget  system."— Governor  Ernest  Lister,  Washington. 

"I  believe  in  the  budget  system  to  the  extent  that  I  would  like  to  see  it  a 
part  of  our  state  constitution  and  made  mandatory.  Business  government, 
where  the  estimates  are  made  and  are  made  with  intelligence  so  that  the 
estimated  amount  will  be  raised  within  a  certain  tax  levy,  renders  efficiency 
and  justice  to  the  taxpayers." — Governor  R.  L.  Williams,  Oklahoma. 

"Florida  has  always  been  practically  under  the  budget  system — that  is  to 
say,  appropriations  are  made  for  a  specified  purpose  which  under  the  law  and 
constitution  cannot  be  exceeded.  In  this  manner  a  limitation  is  placed  upon 
the  expenditures,  of  course,  and  very  little  is  carried  over  to  be  met  by 
deficiency  appropriation.  In  1915,  the  legislature,  realizing  the  economical 


12 

benefits  derived  from  the  plan  used  by  the  state,  required  the  counties  to 
go  upon  a  budget  system.  The  law  has  worked  very  satisfactorily  and  while 
some  few  officials  may  object  to  it  on  account  of  a  little  more  work  in  detail, 
yet,  upon  the  whole,  I  am  sure  that  no  one  would  think  of  having  it 
repealed." — Ernest  Amos,,  Comptroller,  Florida. 

"Probably  the  feature  of  the  budget  system  which  commends  itself  most  to 
the  people  of  the  state  is  the  one  by  virtue  of  which  it  seeks  to  avoid  all 
confusion  and  put  the  statistics  of  state  finance  in  the  open. 

"I  might  write  much  more  regarding  this,  but  think  the  fact  that  no  move 
has  ever  been  made  by  either  party  or  no  suggestion  by  a  responsible  public 
official  that  the  old  system  be  returned  is  sufficient  evidence  of  the  approval 
of  both  parties. 

"The  system  commends  itself  to  conservatives  and  radicals  alike,  because 
at  a  small  expense  it  enables  them  to  know  what  is  happening  in  regard  to 
their  public  finances." — W.  T.  Donaldson,  Budget  Commissioner,  Ohio. 

"This  is  the  second  year  of  the  budget  policy  and  the  first  year  under  my 
supervision.  The  wisdom  of  the  system  cannot  be  disputed." — Governor 
Walter  E.  Edge,  New  Jersey,  in  his  budget  message. 

"The  budget  is  intended  to  help  the  people  exercise,  through  their  chosen 
representatives,  the  right  to  control  the  public  purse,  to  determine  what  work 
shall  be  done  by  the  state,  and  how  much  shall  be  paid  for  it." — Hon  Carl  E. 
Milliken,  Governor,  Maine. 

Dr.  S.  Gale  Lowrie,  Professor  of  Political  Science,  University  of 
Cincinnati,  and  a  well-known  authority  on  budgetary  procedure,  says : 

"There  is  no  more  important  reform  than  the  installation  of  an  adequate 
budget  system  in  our  state  governments.  Only  in  this  way  can  the  affairs 
of  government  be  conducted  efficiently,  economically  and  in  a  way  to  permit  of 
an  orderly  development." 

Professor  A.  R.  Hatton,  Western  Reserve  University,  says : 

"No  single  change  would  aid  so  largely  to  both  democracy  and  ctliciency  as 
the  introduction  of  proper  budget  methods." 

We  know  of  no  political  economist  of  repute  who  does  not  advocate  a 
proper  budget  system  of  financing  governments.  Noted  authorities  on 
public  finance  are  practically  a  unit  in  condemning  the  "log-rolling" 
system  of  voting  away  the  people's  money  and  in  urging  as  a  prime 
essential  to  efficient  and  economical  government  the  adoption  of  modern 
budgetary  procedure. 

After  a  close  study  of  our  fiscal  activities  in  Michigan  and  the  fiscal 
activities  in  other  states,  we  urgently  recommend  the  enactment  of  a 
law  providing  for  a  comprehensive  budget  system  for  our  state  govern- 
ment. We  have  prepared  a  bill  providing  for  such  a  system  and  for  an 
adequate  control  of  state  funds,  a  copy  of  which  bill  is  submitted  here- 
with as  a  part  of  this  report. 


13 

UNIFORM  ACCOUNTING 

Section  eighteen,  article  ten,  of  the  state  constitution  reads  as  follows : 

"The  legislature  shall  provide  by  law  for  the  keeping  of  accounts  by  all 
state  officials,  boards  and  institutions,  and  by  all  county  officials ;  and  shall 
also  provide  for  the  supervision  and  audit  thereof  by  competent  state  authority 
and  for  uniform  reports  of  all  public  accounts  to  such  authority.  Such 
systems  of  account  shall  provide  for  accurate  records  of  all  financial  and  other 
transactions  and  for  checks  upon  all  receipts  and  disbursements  of  all  such 
officials,  boards,  institutions  and  county  officials.  All  public  accounts  and 
the  audit  thereof  shall  be  public  records  and  open  to  inspection." 

Notwithstanding  this  mandate  of  the  people  contained  in  the  consti- 
tution of  1908,  it  was  not  until  1911  that  the  legislature  made  any  attempt 
to  comply  therewith  and  enact  a  uniform  accounting  law.  During  the 
legislative  session  of  that  year  a  strong  effort  was  made  to  enact  such  a 
law  that  would  apply  to  all  state  and  county  offices  and  to  all  state 
institutions.  The  bill  was  passed  as  introduced  by  the  lower  branch  of 
the  legislature  but  it  was  amended  by  the  state  senate  in  such  a  way  as 
to  make  it  of.  little  use.  The  result  is  that  our  system  of  accounting  is 
practically  the  same  now  as  it  was  before  the  1911  law  was  enacted. 

That  this  system  is  wholly  inadequate  and  unsatisfactory  is  conceded 
by  everyone  familiar  with  its  operation.  It  was  the  weakness  of  the 
system  that  undoubtedly  prompted  the  constitutional  convention  to 
embody  the  foregoing  quoted  mandatory  provision  in  the  state  constitu- 
tion, later  adopted  by  popular  vote  of  the  people.  There  is  an  utter  lack 
of  uniformity  in  the  present  system  and  in  only  a  few  instances  are 
accounts  kept  so  as  to  show  actual  cost  of  operation.  Indeed,  under  the 
present  system  of  keeping  accounts,  it  is  impossible  to  ascertain,  with 
any  degree  of  accuracy,  the  actual  cost  of  any  department  of  the  state 
government.  To  get  at  the  approximate  cost  would  be  almost  an  endless 
task,  necessitating  the  assorting  and  examination  of  numberless  vouchers 
and  the  compilation  therefrom  of  cost  articles.  It  will  be  readily  seen, 
therefore,  that  a  comparison  of  actual  costs  for  similar  activities  cannot 
now  be  accurately  made.  Few  of  the  departments  and  offices  have  any 
regular  bookkeeping  accounts,  the  evidence  of  receipts  and  expenditures 
consisting  largely  of  book  memoranda,  vouchers  and  voucher  registers, 
and  through  many  of  these  departments  large  sums  of  money  pass  every 
year. 

Private  business  concerns  rely  upon  their  accounting  systems  to  point 
out  the  weak  spots  in  their  operations;  indeed,  they  will  spend  any 
amount  of  money  necessary  to  perfect  such  an  accounting  system  as  will 
disclose  expenditures  reduced  to  unit  costs  and  thereby  obtain  a  correct 
analysis  of  operation  that  will  enable  them  to  stop  all  possible  leaks. 
If  such  a  system  of  accounting  is  a  good  system  for  private  business, 
surely  it  would  be  a  good  system  for  public  business.  There  is  now  more 
than  seventy  million  dollars  raised  annually  in  Michigan  by  direct  taxa- 
tion and  expended  for  governmental  purposes.  This  vast  sum  of  money 
comes  from  the  pockets  of  the  people  and  they  have  a  right  to  know,  with 
a  reasonable  degree  of  certainty,  what  is  done  with  it.  They  are  entitled 
to  know  of  what  the  public  income  consists,  how  it  is  derived  and  dis- 
bursed and  of  the  financial  condition  of  every  unit  of  government.  They 
are  entitled  to  the  means  of  readily  ascertaining  facts  capable  of  intelli- 


14 

gent  comparison  relative  to  governmental  costs  and  the  benefits  received 
for  money  spent  in  similar  activities.  A  uniform  system  of  accounting 
will  provide  such  means  and  it  will  also  afford  a  means  of  making  a 
comparative  check  of  the  relative  efficiency  and  economy  in  the  adminis- 
tration of  all  governmental  functions.  We  dare  say  that  no  private  busi- 
ness enterprise  would  think  of  adopting  such  a  loose,  unscientific  system 
of  keeping  accounts  as  at  present  obtains  in  the  various  departments  of 
the  state  government,  and  undoubtedly  in  many  of  the  county  govern- 
ments, and,  if  any  private  business  enterprise  would  adopt  such  a  system, 
it  certainly  would  not  spell  "success."  Ordinary  private  business  enter- 
prises everywhere  have  adequate  systems  of  bookkeeping  and  public 
business  should  be  no  exception  to  this  rule. 

It  is  believed  that  if  an  adequate  system  of  accounts  had  been  installed 
in  the  various  public  offices  of  our  state  that  a  large  saving  would  have 
been  made  to  the  taxpaying  public.  This,  we  think,  is  evidenced  from  the 
fact  that  in  nearly  every  county  wherein  expert  examination  of  the  rec- 
ords of  county  offices  and  accounts  has  been  made  a  large  sum  of  money 
has  been  recovered  and  turned  back  in  the  county  treasuries  that  had  been 
irregularly  expended,  these  irregularities  having  been  caused  principally 
by  the  utter  lack  of  a  proper  bookkeeping  system.  Furthermore,  the 
repressive,  or  preventive,  influence  of  a  proper  accounting  system  would 
result  in  much  benefit  to  the  general  public.  It  is  only  through  the  keep- 
ing of  a  complete  set  of  books,  and  the  periodical  examination  thereof 
by  an  expert  central  authority,  that  the  receipt  and  expenditure  of  public 
funds  can  be  properly  safeguarded.  We  do  not  hesitate  to  say  that  if 
such  a  provision  is  made  by  law  no  public  servant  will  dare  misuse  public 
moneys  or  divert  them  from  their  proper  channels.  In  short,  an  adequate, 
uniform  system  of  accounting  in  public  offices  is  one  of  the  keystones  to 
efficient  and  economical  government  and,  therefore,  it  would  not  seem 
possible  that  opposition  to  its  installation  and  operation  should  come 
from  any  source,  and  opposition  will  not  develop  except  among  those 
who  follow  the  "public-be-damned"  policy  of  conducting  public  business. 
Business  men  everywhere  advocate — what  they  practice  in  their  private 
ousiness — an  adequate  system  of  accounting  and  sound  business  methods 
of  conducting  public  business  in  all  its  various  activities. 

That  public  sentiment  demands  the  installation  and  operation  of  a 
uniform  system  of  accounting  in  the  various  institutions,  departments 
and  offices  of  the  state  and  county  governments  is  evidenced  by  the 
adoption  of  the  provision  of  the  constitution  requiring  it.  Surely,  there- 
fore, the  popular  will  of  the  people  should  no  longer  be  ignored  and  the 
carrying  out  of  this  desirable  mandate  as  contained  in  the  constitution 
longer  delayed. 

Many  of  the  states  have  a  uniform  system  of  accounting  in  operation, 
and  in  every  instance  it  has  proven  a  success  and,  from  our  investigation 
of  the  benefits  derived  in  these  states  by  the  installation  of  uniform 
accounting,  we  believe  the  cost  thereof  is  a  mere  "bagatelle"  compared 
with  the  results  obtained.  For  instance,  in  the  state  of  Indiana  for  the 
fiscal  year  ending  June  30th,  1917,  as  a  result  of  the  examinations  made 
by  the  State  Board  of  Accounts,  there  was  a  recovery  of  over  f  100,000.00 
in  cash  that  had  been  irregularly  and  illegally  expended  by  public 
offices,  and,  in  addition,  cases  pending  settlement  aggregated  nearly 
|200,000.00,  of  which  the  accountants  estimated  that  at  least  70  per  cent 


15 

would  be  collected;  so  that  in  one  year  nearly  one  quarter  of  a  million 
dollars  was  recovered  and  turned  back  into  the  various  government 
treasuries.  Furthermore,  a  large  sum  of  money  was  saved  by  the  pre- 
vention of  waste  and  extravagance.  The  Board  of  Accounts  of ~  that 
state  estimated  that  there  was  a  saving  to  the  taxpaying  public  of  over 
one  quarter  of  a  million  dollars  annually  in  the  decrease  of  supplies 
purchased,  as  a  result  of  the  operation  of  the  uniform  accounting  law 
of  the  state.  Practically  the  same  results  have  been  obtained  in  Ohio, 
West  Virginia,  Washington,  Iowa  and  other  states  having  uniform 
accounting  laws. 

Of  the  beneficial  results  obtained  in  the  state  of  Washington,  the 
Chief  Inspector  of  the  Bureau  of  Inspection  and  Supervision  of  Public 
Offices  in  that  state  writes  us  as  follows: 

"The  beneficial  results  in  this  state  from  our  uniform  system  of  accounting 
and  periodical  checks  of  the  records  cannot  be  measured  in  dollars  and 
cents,  because,  by  a  uniform  system  of  accounts  of  the  same  class,  there 
is  always  a  comparison  between  different  cities  and  counties  as  to  the 
moneys  expended  for  the  same  size  taxing  districts,  and  in  addition  the 
officials,  knowing  that  a  check  will  be  made,  are  usually  on  the  alert  to  see 
that  the  records  are  not  only  kept  properly,  but  that  they  are  absolutely  in 
balance,  because,  if  they  are  not,  they  are  held  accountable  for  any  shortage. 

"A  few  public  officials  have  been  sent  to  the  state  penitentiary  for  short- 
ages which  has  had  a  very  good  effect  on  those  in  office. 

"It  is  safe  to  say  that  the  passage  of  this  act  (uniform  accounting  law) 
was  as  important  as  any  act  passed  by  the  legislature  of  the  state  of 
Washington." 

In  a  communication  on  the  operation  of  the  uniform  accounting  law 
in  the  state  of  Indiana,  following  are  excerpts  from  the  report  of  the 
Chief  Examiner  of  the  Board  of  Accounts  in  Indiana : 

"If  we  were  asked  to  sum  up  in  one  sentence  what  is  being  accomplished 
by  the  State  Board  of  Accounts,  we  would  say — efficiency  and  economy  in 
the  administration  of  public  affairs." 

"The  system  has  eliminated  leakage  and  established  accuracy." 

"The  recovery  of  misappropriated  funds  and  the  preventing  effect  of  the 
law  is  not  the  only  good  accomplished ;  the  elevating  of  the  moral  standard  of 
official  life,  in  Indiana,  the  establishing  of  public  confidence  in  officials,  the 
inspiration  to  office-holders  to  establish  and  maintain  efficiency  and  economy 
in  public  affairs,  are  blessings  beneficial  to  the  public  and  the  officials  alike." 

"A  department  organized  for  the  purpose  of  conserving  the  public  funds 
is  at  all  times  desirable,  but  at  this  critical  period  in  our  national  life,  when 
all  the  energies  of  government  are  directed  to  conserve  the  wealth  of  the 
country,  in  order  that  we  may  successfully  cope  with  the  forces  arrayed 
against  liberty  and  civilization,  it  is  the  most  important  factor  in  this  state 
for  spreading  the  propaganda  of  honesty,  efficiency  and  economy." 

Hon.  G.  H.  Hendren,  State  Examiner  of  Indiana,  in  writing  to  this 
commission,  says : 

"Our  Indiana  accounting  system  has  been  giving  the  best  of  satisfaction  and 
results — so  much  so  that,  after  a  thorough  test,  there  are  no  changes  we  desire 
to  make." 

Hon.  Victor  Blue,  who  formerly  had  charge  of  the  administration  of 
the  uniform  accounting  law  in  the  state  of  West  Virginia,  in  communi- 
cating on  the  results  obtained  from  the  operation  of  that  law  in  his 
state,  says : 


"Where  there  was  absolute  chaos  before  the  enactment  of  the  uniform 
accounting  law,  there  is  now  order,  system  and  efficiency.  The  law  has 
accomplished  much  good." 

Hon.  W.  S.  Hallanan,  who  now  administers  the  accounting  law  in  the 
state  of  West  Virginia,  in  a  recent  letter  to  the  commission  relative  to 
the  operation  of  that  law,  says : 

"This  piece  of  legislation  has  proven,  I  think,  to  be  the  most  wholesome  of 
any  legislation  passed  in  this  state  in  the  last  quarter  of  a  century.  Prior 
to  enactment  of  this  law,  financial  matters  all  over  this  state  were  in  con- 
fusion. The  direct  result  of  the  enforcement  of  the  public  accounting  law 
has  been  to  turn  back  into  various  funds  thousands  and  thousands  of  dollars 
that  had  been  wrongfully  expended.  Besides,  we  are  now  reaching  a  condi- 
tion that  anyone  may  at  any  time  know,  by  little  investigation,  the  condition 
of  the  financial  affairs  of  any  fiscal  body." 

The  Auditor  of  the  state  of  Iowa  gives  his  opinion  relative  to  the  opera- 
tion of  the  uniform  accounting  law  in  that  state  as  follows : 

"It  is  one  of  the  best  laws  on  the  statutes  of  Iowa,  and  it  has  had  a  very 
salutary  effect.  Many  thousands  of  dollars,  ranging  in  amounts  from  a  few 
dollars  to  several  thousand  dollars,  have  been  returned  to  the  county 
exchequers  by  the  various  officials  who  misappropriated  county  funds." 

In  advocating  a  unification  of  fiscal  accounting,  Hon.  William  H. 
Taft,  during  his  incumbency  of  the  office  of  President,  said  : 

"I  want  to  have  figures  that  will  enable  me,  like  the  manager  of  a  big 
corporation,  to  send  for  one  of  the  heads  of  a  department  and  ask  him  why 
he  is  spending  more  money  than  another  department  chief  for  precisely  the 
same  article.  I  want  to  call  attention  to  the  fact  that  the  expenses  of  a 
department  are  greater  this  year  than  last  so  that  I  can  learn  the  reason  for 
the  increase." 

We  might  continue  to  quote  similar  experiences  relative  to  the  suc- 
cessful operation  of  uniform  accounting  laws  and  of  the  large  benefits 
obtained  therefrom,  but  we  do  not  think  it  is  necessary  to  go  any  further 
into  the  matter.  We  have  confidence  in  the  good  business  sense  of  the 
legislature  and  that  it  will  carry  out  the  will  of  the  people  as  expressed 
in  the  state  constitution. 

STATE  PURCHASING 

Under  the  present  method  of  state  purchasing,  we  have  practically  as 
many  purchasing  agents  as  we  have  institutions  and  departments  of  1ho 
state  government,  with  the  result  that  one  department  or  institution 
buys  supplies  in  ignorance  of  what  another  is  doing  along  the  same  lines. 
Furthermore,  there  are  no  central  records  maintained  showing  the  rela- 
tive cost  of  supplies  bought  by  the  various  departments  and  institutions, 
making  it  exceedingly  difficult  to  make  a  comparison  of  the  relative  cost 
of  the  various  things  purchased  by  the  different  units  of  government. 
It  will  readily  be  seen  how  impossible  it  is  under  such  a  decentralization 
of  buying  to  fix  responsibility  for  waste  and  extravagance.  There  really 
is  no  order  or  system  in  the  present  method  of  purchasing  supplies  by 
the  state  government.  Supplies  of  the  same  kind  and  quality  oftentimes 
are  bought  at  the  same  time  by  various  institutions  and  departments,  at 
varying  prices,  these  supplies  being  largely  bought  in  the  open  market 
which  means  retail  rather  than  wholesale  prices.  There  being  very  little 
standardization  of  things  bought  by  the  state,  everybody  buys  just  what 


17 

he  likes  and  as  much  as  he  likes  without  any  check  upon  waste  and 
extravagance. 

Where  such  a  condition  exists  in  the  purchasing  system,  of  any  govern- 
ment, the  door  to  dissipation  of  the  people's  money  is  left  wide  open. 
The  cure  for  this  condition  is  the  establishment  of  a  central  purchasing 
department  such  as  is  maintained  by  large  industrial  enterprises  every- 
where. It  is  only  through  purchases  made  by  a  central  authority  that 
the  state  can  obtain  the  lowest  possible  prices,  because  centralized  buying 
would  mean  large  quantities,  and  it  is  a  fundamental  principle  of  supply 
and  demand  that  the  larger  the  quantity  purchased  the  lower  the  price. 
It  stands  to  reason  that  flour,  for  instance,  contracted  for  at  one  time  for 
the  institutions  of  the  state  could  be  obtained  at  a  much  lower  price  than 
if  it  were  bought  by  twenty-five  different  agencies  and  at  as  many  differ- 
ent periods.  Everything  used  by  all  departments  and  institutions  for  the 
same  purpose  should  be  purchased  at  one  time  under  contract  entered 
into  subsequent  to  competitive  bidding.  Not  only  would  this  result  in 
lower  prices,  but  it  would  result  in  a  considerable  saving  of  money  in  the 
lessening  of  the  number  of  vouchers  and  the  work  entailed  in  auditing 
them  and,  furthermore,  it  would  make  it  comparatively  easy  to  make  an 
analysis  of  the  relative  cost  of  everything  which  goes  into  the  various 
institutions  and  departments  of  the  state  government.  Under  the  present 
system  of  purchasing  this  is  almost  impossible  of  accomplishment.  Under 
a  centralized  system  gross  quantities  would  be  bought  under  a  single 
contract,  whereas,  now  the  purchases  are  made  upon  a  number  of  different 
contracts  and  at  widely  varying  prices.  A  centralized  purchasing  agency 
would  result  in  an  audit  of  proposed  expenditures  for  supplies  before 
such  expenditures  are  made,  whereas,  under  the  present  method  of  pur- 
chasing, the  money  is  often  spent  and  goods  delivered  before  an  audit 
can  be  made.  This  surely  is  a  most  unwise  way  of  conducting  the 
purchasing  end  of  the  state's  business  and,  in  justice  to  the  taxpaying 
public  of  the  state,  it  should  be  remedied.  It  is  our  belief  that  a  properly 
conducted  central  agency  for  the  purpose  of  purchasing  state  supplies 
would  result  in  a  large  saving  to  the  taxpayers  of  the  state  and  in  getting 
better  quality  for  money  expended.  This  has  been  the  result  in  every 
state  and  in  every  city  wherein  a  central  purchasing  agency  has  been 
in  operation. 

It  is  true  that  since  1.912  there  has  been  some  improvement  in  the 
purchases  made  by  the  state  institutions.  At  that  time  there  was  organ- 
ized what  is  known  as  the  "State  Institutional  Buyers'  Association," 
consisting  of  the  executive  heads  and  the  stewards  of  the  state  institu- 
tions. Through  this  association  there  has  been  more  or  less  of  a  stand- 
ardization of  things  purchased  by  the  institutions,  schedules  made  up 
of  various  requirements  and  a  portion  thereof  purchased  under  contract, 
following  competitive  bidding.  The  result  of  the  work  of  this  association 
has  undoubtedly  been  a  considerable  saving  of  money  in  the  purchases 
mado.  This,  we  think,  is  acknowledged  by  those  active  in  the  work  of  the 
association.  If  such  is  the  case  and  the  little  unification  of  purchases 
made  by  the  association  is  a  success,  then  surely  a  larger  unification, 
embodying  all  the  activities  of  the  state  government,  would  be  a  still 
greater  success  and  result  in  a  much  larger  saving  of  money.  The 
principal  object  of  the  organization  of  the  association  was  to  centralize 
purchasing :  and  we  have  no  complaint  to  make  of  the  good  work  of  the 


18 

association  in  that  direction.  However,  there  is  room  for  improvement 
as  is  evidenced  by  the  fact  that  not  more  than  25  per  cent  of  the  purchases 
made  by  the  institutions  of  the  state  were  made  last  year  through  the 
Institutional  Buyers'  Association.  It  lias  been  suggested  that,  if  a  law 
were  enacted  making  it  compulsory  for  all  the  institutions  to  make  their 
purchases  through  that  association,  much  better  results  would  be 
obtained.  Be  that  as  it  may,  there  is  no  good  reason  why  a  central  pur- 
chasing agency  should  not  be  established  to  embrace  all  activities  of  the 
state  government.  The  Institutional  Buyers'  Association  is  an  improve- 
ment over  past  methods,  is  good  so  far  as  it  goes,  but  certainly  does  not 
go  far  enough.  When  it  is  considered  that  many  millions  of  dollars  of 
the  people's  money  are  spent  annually  by  the  state  for  supplies  of  various 
kinds,  it  will  be  appreciated  how  essential  it  is  that  the  utmost  care  be 
exercised  in  purchasing  these  supplies  and  the  most  up-to-date  system  of 
purchasing  maintained — a  system  that  would  make  possible  the  stoppage 
of  all  waste  and  extravagance.  We  believe  that  in  no  other  way  can  the 
highest  degree  of  efficiency  be  maintained  in  purchasing  supplies  for  the 
state  government  than  by  a  centralization  of  control. 

It  is  perhaps  needless  to  say  that  large  private  business  enterprises 
are  founded  on  the  principle  of  centralization  and  that  their  purchases 
are  all  made  through  one  agency.  Why  should  not  the  same  principle  of 
purchasing  be  followed  in  public  business  as  in  private  business?  The 
only  excuse  there  can  be  for  not  doing  so  is  that,  by  the  establishment  of 
a  central  purchasing  department,  those  who  now  exercise  the  privilege 
of  buying  for  the  state  would  be  deprived  of  their  powers  in  this  direction. 
However,  it  is  not  believed  that  it  is  good  business,  or  a  correct  policy,  for 
the  state  to  follow,  to  satisfy  the  yearning  for  authority,  in  a  matter  of 
this  kind  when  to  do  so  would  be  at  the  expense  of  the  people  of  the 
state.  "Correct  business"  should  be  the  aim  of  every  public  servant  and 
not  the  continual  reaching  out  for  more  and  more  authority  irrespective 
of  the  public  welfare.  If  central  purchasing  is  a  good  thing — and  we 
believe  it  is — there  is  no  good  sense  in  longer  delaying  its  establishment 
simply  because  a  few  public  servants  will  be  deprived  of  a  little  authority. 
A  large  number  of  the  states  have  a  centralized  purchasing  system, 
namely:  Alabama,  Arizona,  California,  Delaware,  Florida,  Georgia, 
Indiana,  Illinois,  Iowa,  Kansas,  Minnesota,  Nebraska,  New  Hampshire, 
New  Jersey,  North  Dakota,  Ohio,  Oregon,  South  Dakota,  Tennessee, 
Texas,  Vermont,  Virginia,  WTest  Virginia  and  Wisconsin.  Several  other 
states  have  a  partially  centralized  system,  and  the  executive  officers 
of  other  states  are  advocating  the  enactment  of  laws  providing  for  such 
a  system.  The  trend  everywhere  is  toward  a  centralization  in  the  making 
of  purchases  by  governments. 

The  state  of  New  York  at  this  writing  is  conducting  an  investigation 
of  purchasing  systems  with  the  object  in  view  of  establishing  a  central 
agency  in  that  state.  The  Chamber  of  Commerce  of  the  state  of  New 
York,  at  a  meeting  held  the  early  part  of  this  year,  unanimously  adopted 
a  resolution  calling  for  the  enactment  of  a  law  to  consolidate  the  pur- 
chases of  all  supplies  for  the  state  in  the  hands  of  a  central  authority. 
Two  of  the  paragraphs  of  said  resolution  we  quote  as  follows : 

"Whereas,  The  state  of  New  York  has  over  165  boards,  commissions  and 
other  departments,  each  buying  its  own  supplies,  involving  needless  duplica- 


19 

tion  in  printing,  advertising  and  distribution  of  proposals  in  the  preparation 
and  execution  of  contracts ;  and. 

"Whereas,  The  consolidation  of  purchases  under  the  control  of  a  single 
central  buying  agency  would  eliminate  needless  duplication ;  would-  enable 
purchases  to  be  made  in  wholesale  instead  of  retail  quantities  as  is  often 
now  the  case;  would  result  in  a  material  saving  on  the  part  of  the  state  in 
its  expenditures  for  supplies ;  and  would  bring  about  many  obvious  econo- 
mies ;" 

Such  a  resolution,  coming  from  the  leading  business  men  from  the 
various  parts  of  the  state  of  New  York,  constitutes  a  recommendation 
that  can  hardly  be  ignored  by  anyone  having  good  business  sense.  Busi- 
ness men  everywhere  are  practically  a  unit  in  advocating  the  centraliza- 
tion of  authority  to  make  purchases  into  one  agency.  Having,  by 
experience  in  the  conduct  of  big  private  business,  seen  the  benefits 
obtained  from  such  a  centralization,  they  are  now  advocating  the  same 
system  of  purchasing  for  public  business.  Many  of  these  men  are  cap- 
tains of  industry,  contribute  large  sums  of  money  toward  the  support  of 
government  and  consequently  are  deeply  interested  in  the  conduct  of 
public  business  and  the  establishment  and  operation  of  the  most  efficient 
and  economical  system  of  conducting  government. 

In  our  correspondence  with  the  various  states  having  a  central  purchas- 
ing system,  we  find  that  large  sums  of  money  have  been  saved  by  the 
operation  of  such  a  system.  There  has  also  been  more  efficient  service 
and  a  better  quality  of  goods.  Following  are  a  few  excerpts  from  some  of 
this  correspondence: 

George  Leavy,  State  Purchasing  Agent  of  the  state  of  Texas,  says: 

"The  chief  argument  we  have  is  that  the  total  amount  of  all  institutions  in 
Texas  aggregates  so  much  that  we  make  all  our  purchases  from  either  the 
manufacturer  or  the  jobber,  thereby  saving  profit  that  is  made  by  the  smaller 
concerns.  Last  year  we  purchased  fifteen  thousand  barrels  of  flour  at  $5.40 
per  barrel  which  was  $13.00  per  barrel  before  the  contract  expired.  On 
thousands  of  other  articles  the  profit  was  nearly  as  much.  We  saved  at  least 
33%  per  cent  on  dry  goods,  40  per  cent  on  groceries  and  in  some  instances  as 
much  as  150  per  cent  on  hardware  and  steel. 

"We  find  merchandise  that  is  suitable  for  one  asylum  is  proper  in  every 
way  for  the  other.  Merchandise  used  for  one  normal  school  is  practically 
what  is  needed  in  the  other  state  normals,  and  likewise  in  hardware  and 
other  lines  of  merchandise." 

Governor  Goodrich  of  Indiana  says : 

"By  an  act  of  the  last  General  Assembly,  a  purchasing  committee  was 
authorized.  Under  the  direction  of  this  committee,  they  have  standardized 
all  supplies  and  are  working  upon  a  plan  through  the  committee  to  centralize 
the  purchase  of  all  staple  products  in  the  hands  of  a  single  person  or  a  com- 
mittee of  three.  I  am  quite  certain  that  one  thoroughly  competent  business 
man,  with  authority  to  purchase  all  the  supplies  for  all  the  state  needs, 
could  buy  much  cheaper  than  could  a  number  of  separate  boards,  or  even  a 
committee  of  three." 

The  Purchasing  Agent  of  the  state  of  Minnesota  writes: 

"Experience  of  the  period  covering  the  centralized  purchasing  for  institu- 
tions has  demonstrated  beyond  the  shadow  of  a  doubt  the  great  saving 
effected  by  means  of  such  purchases." 


20 

Governor  Lindsey  of  New  Mexico  writes : 

"I  am  very  much  in  favor  of  a  purchasing  board,  or  rather  a  single  pur- 
chasing agent,  empowered  to  make  all  purchases  for  the  state." 

Hon.  John  S.  Denton,  President  of  the  Tennessee  Board  of  Control, 

savs : 

"Our  purchasing  department  advertises  and  solicits  bids  monthly  for  the 
wanted  articles  for  current  use  and  advertises  for  proposals  to  iill  yearly 
contracts  on  such  commodities  as  we  find  it  desirable  to  buy  for  that  or  a 
shorter  period.  This  system  has  worked  to  the  great  financial  advantage 
of  the  state  and  its  institutions. 

"Under  the  old  system  the  trustees  of  each  institution  either  appointed  a 
purchasing  agent  or  designated  someone  connected  with  the  institution  to 
buy  supplies.  The  purchases  were  made  from  local  dealers  and  in  many 
cases  from  favorite  dealers,  generally  at  retail  prices,  and,  as  a  result,  the 
state  not  only  paid  higher  prices  for  practically  everything  it  used  in  the 
institutions,  but  the  goods  were  generally  of  inferior  quality.  We  unhesitat- 
ingly recommend  the  centralized  purchasing  board  or  system  for  all  state 
institutions." 

Governor  Edge  of  New  Jersey  says: 

"I  most  emphatically  approve  of  a  central  purchasing  system  for  all  state 
supplies.  In  fact,  when  a  member  of  the  legislature,  I  introduced  and  spon- 
sored a  bill  which  resulted  in  the  installation  of  the  central  purchasing  system 
in  New  Jersey,  and  that  system,  aftei  an  experience  of  several  years,  is 
proving  very  successful  indeed." 

The  Board  of  Control  of  State  Institutions  of  North    Dakota  writes 
as  follows : 

"Our  system  of  purchase  allows  us  to  show  the  greatest  maximum  of 
business  and  has  permitted  us  to  make  our  contracts  with  the  very  best 
houses,  which  has  resulted  in  obtaining  close  prices  on  goods  wanted  at  our 
small  institutions  as  well  as  at  large  ones.  We  believe  fully  that  a  central 
body  can  make  a  distinct  saving  in  your  purchases  as  combining  all  your 
wants  in  one  line,  under  one  cover,  will  make  the  business  you  have  to  offer 
attractive  to  any  house." 

Mr.  W.  G.  McMillin,  Purchasing  Agent  of  the  state  of  California,  says: 

"By  comparing  market  quotations  and  market  conditions  with  the  result 
secured  by  our  purchasing  department,  we  are  able  to  show  marked  saving 
in  expenditures,  and  the  very  fact  of  the  unusual  business  conditions  existing 
and  the  scarcity  of  supplies  in  many  lines  has  shown  a  greater  need  for  a 
central  purchasing  department  for  the  securing  of  those  supplies." 

The  Oregon  State  Board  of  Control  says : 

"Before  this  board  was  organized,  our  institutions  were  paying  retail 
prices  for  a  great  deal  of  their  merchandise.  Under  the  pre.-ent  system,  we 
are  recognized  the  same  as  the  large  dealers  and  secure  prices  accordingly, 
therefore,  have  saved  the  state  thousands  of  dollars." 

Mr.  Charles  B.  Christy,  Secretary  to  the  Commissiori  of  State  Institu- 
tions of  the  state  of  Arizona,  writes  us  as  follows: 

"Our  commission,  organized  and  authorized  by  the  last  legislature,  believe 
that  a  central  purchasing  board  or  agent  system  is  far  preferable:  that  the 
most  economical  method  of  handling  can  be  observed  by  putting  this  into 
the  hands  of  a  central  board  who  will  not  only  avail  themselves  of  best 


21 

prices  possible  on  account  of  purchasing  in  quantities,  but  will  also  scan  and 
question  extravagance  in  purchasing." 

Governor  Bilbo  of  Mississippi  says : 

"I  believe  that  a  central  purchasing  board  ought  to  work  well  and  it 
honest,  conscientious  and  first-rate  business  men  could  be  selected,  I  believe 
it  would  result  in  money  saved."  • 

We  might  continue  these  quotations  from  states  having  had  experience 
in  central  purchasing,  all  of  which  speak  of  its  operation  with  high  favor. 

Last  fall  the  commission  visited  Washington  for  the  purpose  of  study- 
ing the  purchasing  system  inaugurated  by  the  Navy  Department.  Under 
this  system,  the  -purchases  of  everything  used  by  the  Navy  are  made  by 
a  central  authority.  The  Paymaster  General  of  the  Navy,  Admiral 
McGowan,  has  direct  supervision  over  the  purchasing  department.  When 
it  is  considered  that  this  department  of  the  United  States  Government 
purchases  every  month  supplies  and  equipment  amounting  to  many 
millions  of  dollars,  its  magnitude  will  be  appreciated.  Of  the  success  of 
the  new  system  we  can  do  no  better  than  quote  from  Admiral  McGowan's 
report  for  1917,  as  follows : 

"If  the  principle  of  centralized  purchasing  for  the  naval  system  needs 
any  justification,  the  developments  of  the  few  months  since  the  war  began 
would  amply  furnish  it." 

This  purchasing  division  of  the  United  States  Navy  Department  has 
been  brought  up  to  the  highest  degree  of  efficiency,  resulting  not  only 
in  quick  buying  of  supplies  of  better  quality  and  grades,  but  also  at 
lower  prices  than  obtained  prior  to  the  inauguration  of  the  system. 
The  success  of  the  centralization  of  authority  to  purchase  by  the  Navy 
Department  has  prompted  the  government  to  move  for  a  similar  system 
in  other  departments  in  Washington.  We  understand  that  the*  War 
Department  has  recently  inaugurated  a  similar  system.  Under  this 
system  of  centralization,  everything  needed  by  the  Navy  Department  is 
standardized  by  experts  who  also  pass  upon  all  requests  for  supplies, 
all  purchases  being  made  in  accordance  with  these  standards  expressly 
specified.  The  department  kpeps  a  classified  index  of  all  manufacturers, 
wholesalers  and  jobbers  who  manufacture  or  deal  in  supplies  used  by  the 
Navy  Department.  When  the  Navy  is  in  need  of  any  supplies,  notice  is 
sent  to  each  of  these  concerns  requesting  bids ;  and  there  is  also  a  public 
advertisement  calling  for  bids.  These  bids  come  in  under  seal,  are 
deposited  in  a  container,  which  is  kept  locked  until  the  specified  time  for 
opening  bids  has  been  reached,  and  at  the  specified  time  these  bids  are 
taken  from  the  container  and  publicly  opened,  anyone  interested  being 
given  the  opportunity  of  witnessing  the  opening  of  the  bids.  A  force 
of  clerks  are  on  hand  to  make  proper  tabulation  of  the  bids  on  appro- 
priate forms  as  fast  as  such  bids  are  opened,  so  that  almost  immediately 
upon  the  close  of  the  opening  of  the  bids  it  is  known  who  are  the  lowest 
bidders  for  the  various  classes  of  supplies  called  for.  Everything  is 
purchased  under  contract  and  the  successful  bidder  is  required  to  give  a 
bond  for  the  faithful  performance  of  his  contract. 

There  does  not  seem  to  be  any  good  reason  why  the  state  of  Michigan 
should  not  make  its  purchases  by  a  similar  system.  Our  state  buying 
runs  into  many  millions  of  dollars  every  year ;  and  this  money  is  mostly 


22 

derived  from  direct  taxation,  coming  from  the  pocketbooks  of  the  people. 
The  people,  therefore,  are  entitled  to  the  consideration  of  having  all 
supplies  purchased  by  the  state  in  the  most  systematic  and  economical 
manner. 

As  a  result  of  our  investigation  and  study  of  the  purchasing  problem, 
we  unhesitatingly  recommend  the  enactment  of  a  law  providing  for  the 
establishment  of  a  central  purchasing  department,  charged  with  the 
duty  of  purchasing  all  supplies  required  for  the  proper  conduct  of  the 
various  activities  of  the  state  government.  This  department  should  be 
headed  by  an  officer  to  be  designated  "State  Purchasing  Agent/'  to  be 
appointed  either  by  the  Governor  or  by  the  Board  of  State  Auditors, 
preferably  by  the  former  as  the  executive  head  of  the  state  government 
and  in  whom  would  be  fixed  the  direct  responsibility  for  the  proper  con- 
duct of  the  department.  In  case  it  should  be  decided  that  the  Board  of 
State.  Auditors  should  make  the  appointment,  then  it  should  be  provided 
that  the  purchasing  should  be  done  under  the  supervision  of  said  board 
through  its  purchasing  agent.  We  do  not  believe  that  any  law  providing 
such  a  department  should  contain  too  many  rules  and  regulations  cover- 
ing state  purchasing,  but  that  the  authority  to  make  such  rules  and  regu- 
lations should  be  delegated  to  the  purchasing  department.  The  powers  of 
the  department  should  be  broad  and  not  restrictive.  It  will  be  appre- 
ciated how  essential  this  is  to  the  success  of  central  purchasing  because 
of  the  constantly  changing  market  conditions. 

In  order  that  the  state  purchasing  agent  may  receive  the  benefit  of 
•the  knowledge  gained  by  the  purchasing  agents  of  the  state  institutions 
in  making  purchases  and  their  knowledge  of  the  needs  of  such  institu- 
tions, we  recommend  that  the  steward  of  every  institution — or,  where 
there  is  no  steward,  the  executive  head  of  each  institution — constitute 
an  advisory  council  to  the  central  purchasing  agent,  and  that  this  council 
be  required  to  meet  periodically  with  the  purchasing  agent  for  the  pur- 
pose of  consultation  relative  to  the  work  of  the  purchasing  agent's  depart- 
ment. 


STATE  PRINTING 

The  annual  cost  of  state  printing  has  grown  to  be  quite  a  sum  of 
money.  Last  year  there  was  expended  by  the  state  ftlttiMOl.OO  for  publi- 
cations, consisting  of  books,  reports  and  bulletins.  In  addition  there  was 
a  large  sum  of  money  expended  for  job  printing,  stationery,  cards,  blanks, 
etc.  With  an  efficient  system  for  the  control  of  this  printing,  the  cost 
would  not  have  exceeded  two-thirds  of  the  amount  expended  last  year. 
Many  of  the  reports  published  by  the  state  contain  a  mass  of  material 
of  little  or  no  use  to  the  general  public  and  are  scarcely  ever  read  by 
anyone.  Instead  of  publishing  concise  statements  of  activities  and  com- 
piling and  publishing  statistics,  in  classified  aggregates,  the  utmost 
detail  is  resorted  to.  This  necessitates,  of  course,  a  very  large  amount 
of  clerical  work  which,  added  to  the  cost  of  printing,  binding  and  paper, 
amounts  to  a  large  sum  of  money  that  is  absolutely  wasted.  There  is 
hardly  a  report  published  by  the  state  that  could  not  be  condensed  to 
one-half  of  its  present  size  and  in  consequence  would  be  of  much  more 
value  to  the  public  and  would  be  read  and  studied  by  a  much  larger 
number  of  our  people. 


23 

Furthermore,  most  of  these  reports  are  belated  reports,  some  of  them 
containing  statistical  and  other  information  gathered  two  or  three  years 
before  being  presented  to  the  public.  One  report  recently  came__to_our 
notice  which  was  issued  the  early  part  of  1917  and  contains  statistics  for 
the  year  of  1914.  The  publication  of  such  a  report  is  extremely  repre- 
hensible. A  statistical  report  must  be  recent  to  be  of  any  value.  Reports 
that  are  published  two  or  three  years  after  they  become  due  constitute 
a  waste  of  public  funds. 

Much  blame  undoubtedly  rests  with  the  state  printer  for  the  lateness 
of  many  of  our  state  publications.  It  seems  that  other  than  state  printing 
is  given  precedence  in  a  great  many  instances  with  the  result  that  state 
printing  oftentimes  has  to  wait  so  long  that  the  delay  becomes  exasperat- 
ing to  the  executive  heads  of  the  state  departments.  It  is  suggested  that 
some  way  be  found  for  penalizing  the  state  printer  for  failure  to  deliver 
state  documents  within  a  reasonable  prescribed  period. 

Another  thing,  there  are  altogether  too  many  copies  of  state  publica- 
tions printed  and  distributed.  This  is  evidenced  by  the  large  number  of 
volumes  of  different  kinds  of  publications  that  have  been  sold  for  waste 
paper.  In  1916,  twenty-eight  tons  of  the  compiled  laws  of  1897  were 
sold  for  waste  paper,  for  which  the  state  received  $31.00  a  ton,  or 
a  fraction  more  than  23  cents  for  each  set  of  the  laws.  Each  set  of  these 
laws  cost  the  state  approximately  $5.00,  so  that  there  resulted  an  absolute 
waste  of  over  $17,000.00  in  the  over-publication  of  these  laws.  There 
is  the  utmost  recklessness  in  the  method  of  publishing  and  distributing- 
state  publications.  Reports  and  other  documents  are  sent  out  indiscrimi- 
nately without  any  knowledge  as  to  whether  they  are  wanted  by  the 
people.  For  instance,  a  county  clerk  recently  reported  to  the  Budget 
Comrrission  that  he  had  just  sold  two  tons  of  state  publications  for  waste 
paper,  there  having  been  but  few  requests  from  the  people  in  the  county 
for  such  publications. 

Surely,  it  is  time  that  something  be  done  toward  stopping  this  waste 
of  public  funds  incident  to  our  state  printing.  We,  therefore,  urgently 
recommend  that  a  law  be  enacted  providing  for  a  director  of  state 
publications.  This  director  should  be  the  Board  of  State  Auditors,  who 
in  turn  should  be  directed  to  appoint  a  state  supervisor  of  printing.  Said 
director  of  publications  should  be  clothed  with  general  supervisory 
powers  over  the  printing  and  distribution  of  all  publications  relating  to 
the  activities  of  the  state  government.  The  director  should  be  given 
authority  to  prescribe  the  form  and  extent  of  all  reports  and  other  publi- 
cations of  each  department,  institution,  board,  commission  and  office  of 
this  state ;  should  determine  the  number  of  pages  to  which  any  such  pub- 
lication may  extend  and  also  the  kind  of  paper  and  binding  to  be  used  in 
such  publications.  The  enactment  of  such  a  law,  we  are  quite  sure,  would 
result  in  a  large  saving  of  money  to  the  taxpayers  of  the  state,  and  would 
also  result  in  the  publication  of  reports,  etc.,  that  would  be  readable  and 
of  more  value,  and  in  eliminating  entirely  the  publication  of  those  which 
are  of  little  or  no  value  to  the  public. 

It  has  been  suggested  to  us  that  the  state  engage  in  the  business  of 
printing  on  its  own  account  rather  than  by  private  contract.  We  are 
not  prepared  to  say  that  this  would  be  the  best  thing  for  the  state  to  do 
at  th's  time.  We  believe,  however,  that  if  it  can  be  done  without  violat- 
ing the  provisions  of  the  constitution,  the  Industrial  School  for  Boys  and 


24 

the  State  Prison  at  Jackson  might  print  most,  if  not  all,  the  stationery 
and  blank  forms  used  by  the  state,  leaving  only  book  printing  and  binding 
to  be  done  under  private  contract.  This,  we  think,  is  a  matter  that  might 
well  receive  consideration  at  the  hands  of  the  next  legislature. 

STATE  INSTITUTIONS 

All  the  state  institutions  have  been  visited  at  least  once  by  the  com- 
mission, or  certain  members  thereof,  and  a  close  study  made  oi'  adminis- 
trative matters.  We  found  that  the  administrative  allairs  of  nearly  all 
the  institutions  are  being  conducted  by  men  of  high  character  and  ability 
and,  in  many  cases,  the  personal  services  of  these  men  arc  being  given  to 
the  state  at  considerable  sacrifice. 

With  the  exception  of  special  criticism  of  the  Industrial  School  for 
Boys  at  Lansing,  and  the  State  Prison  at  Jackson,  the  only  criticism  we 
have  to  make  relates  to  the  purchasing  and  accounting  systems.  To 
these  features  we  have  called  attention  in  other  parts  of  this  report. 

Industrial  School  for  Boys: 

We  regret  to  say  that  conditions  at  the  Industrial  School  for  Boys  are 
far  from  satisfactory.  We  do  not  mean  by  that  to  reflect  on  the  adminis- 
trative officers.  The  present  Superintendent  we  believe  to  be  an  efficient 
man,  and  it  is  no  fault  of  his,  nor  of  the  Board  of  Control,  to  any  great 
extent,  that  the  present  condition  of  affairs  is  unsatisfactory.  In  our 
investigation  of  the  school,  we  found,  among  other  things,  that  a  large 
number  of  the  boys  sleep  on  the  third  floor  of  the  cottages,  where  there 
are  no  fire  escapes,  and  where  there  are  far  from  adequate  sanitary 
arrangements.  The  exit  from  these  floors  is  by  way  of  a  narrow  stairway, 
in  some  cottages  two  narrow  stairways,  and  these  stairways  are  very 
steep.  In  case  of  fire,  there  does  not  seem  any  possibility  of  escape  for 
these  boys.  Furthermore,  no  arrangements  haVe  been  made  for  furnish- 
ing these  boys  with  drinking  water.  We  were  told  by  the  Superintendent 
that  when  these  boys  wanted  a  drink  of  water  they  .usually  dipped  it  out 
of  the  flush  box  of  the  toilet.  Sometimes  during  the  hot  weather  of  sum- 
mer they  would  carry  water  up  in  pails.  It  is  also  to  be  noted  that  these 
boys  are  not  furnished  with  night  shirts  in  which  to  sleep.  The  bathing 
facilities  are  inadequate  and  unsanitary.  The  only  way  the  boys  can 
bathe  is  to  stand  under  an  irrigation  pipe  in  the  basement  of  the  cottages, 
which  is  also  the  place  where  they  wash  their  face  and  hands.  That 
these  boys  should  be  thus  treated,  it  seems  to  us,  is  anything  but  credit- 
able to  the  state.  Surely,  the  institution  should  be  furnished  with  suffi- 
cient funds  to  remedy  these  conditions  ;  and  this  should  be  done  forthwith. 
These  boys  are  human  beings  and  it  should  be  the  policy  of  the  state  in 
sending  them  to  the  school  to  use  every  endeavor  to  build  character  in 
these  boys  and  not  place  around  them  such  conditions  as  will  induce 
them  to  return  to  waywardness  after  they  are  discharged  from  the 
school.  The  present  conditions  at  the  school  are  such  as  to  offer  every 
inducement  for  sex  perversion,  and  from  what  we  have  learned,  from  our 
investigation,  there  is  considerable  of  this  carried  on.  Surely  the  state 
should  take  whatever  steps  may  be  necessary  to  better  these  conditions 
in  order  that  these  boys  may  be  taken  care  of  in  such  a  way  as  to  make 


25 

them  better  boys  and  not  worse  boys  than  before  they  were  sent  there. 
Referring  to  the  neglect  to  furnish  fire  escapes,  it  is  pertinent  to 
remark  that  the  state  employs  inspectors  who  travel  around  the  state  all 
the  time  to  see  that  public  buildings  are  furnished  with  adequate  fire 
escapes  and  where  it  is  not  done  the  owners  of  these  buildings  are  pun- 
ished as  provided  by  law ;  and,  at  the  same  time,  we  have  a  state  institu- 
tion, almost  under  the  dome  of  the  capitol  building,  without  any  fire 
escapes,  where  there  are  on  an  average  about  eight  hundred  boys  kept 
for  corrective  and  educational  purposes. 

State  Prison.,  Jackson: 

A  great  deal  has  appeared  in  the  press  from  time  to  time  relative  to 
the  supposedly  efficient  manner  in  which  the  affairs  of  the  State  Prison 
have  been  administered,  particular  reference  being  made  to  the  claim 
that  the  prison  has  not  for  some  years  cost  the  taxpayers  any  money; 
in  other  words,  that  it  has  been  a  self-sustaining  institution.  In  our 
criticism  of  this  claim,  we  desire  that  it  be  strictly  understood  that  we 
are  not  interested  in  the  least  in  present  or  past  political  squabbles  con- 
cerning it.  We  believe,  however,  that  it  is  our  duty  to  bring  the  facts 
before  the  people  as  we  find  them.  It  is  true  that  the  profit  and  loss 
statement  issued  by  the  prison  authorities  shows  a  profit ;  but  this  profit 
has  been  based  on  the  current  expense  account  of  the  prison  only  and  not 
on  the  total  moneys  involved  in  its  operation.  All  moneys  from  whatever 
source  derived  by  the  State  Prison  should  have  been  carried  into  the 
profit  and  loss  statement  in  proper  accounting  form.  If  this  had  been 
done,  the  profit  and  loss  statement  would  have  shown  a  much  different 
result.  Furthermore,  in  its  mad  rush  to  make  a  showing  of  earnings, 
the  buildings  and  equipment  of  the  prison  have  been  permitted  to  deteri- 
orate to  such  an  extent  that  it  will  take  a  very  large  sum  of  money  to 
place  them  in  proper  condition.  This  certainly  is  anything  but  credit- 
able to  the  administrative  officers  of  the  prison.  Not  only  so,  but  a 
considerable  portion  of  the  so-called  earnings  of  the  prison  was  the  result 
of  appreciation  in  the  value  of  materials  and  was  not  derived  from 
actual  operation  of  industries. 

After  all,  the  making  of  money  by  the  State  Prison,  or  any  other 'prison, 
should  be  a  secondary  consideration ;  the  first  consideration  should  be 
to  build  character  in  the  men  confined  there  and  to  place  them  at  such 
work  as  would  enable  them,  upon  their  discharge,  to  go  into  society  and 
earn  an  honest  living.  In  this  connection,  it  is  pertinent  to  say  that 
the  binder  twine  industry  at  the  State  Prison,  while  a  success  as  a  money- 
maker, is  not  a  success  from  a  vocational  standpoint.  We  understand 
that  there  are  practically  no  private  concerns  engaged  in  the  manufacture 
of  binder  twine;  so  that  when  a  prisoner  leaves  the  prison,  after  several 
years  of  work  in  the  binder  twine  plant,  he  has  learned  nothing  that 
will  be  of  any  use  to  him  and,  therefore,  he  is  more  than  likely  to  return 
to  his  old  ways  of  living.  It  might  well  be  the  policy  of  the  state  to  pay 
a  little  more  attention  to  the  welfare  of  these  prisoners  who  some  day 
will  go  back  into  society  than  to  pay  so  much  attention  to  the  art  of 
money-making. 

The  accounting  system  at  the  prison,  until  recently,  was  unsatisfactory. 
We  are  glad  to  say,  however,  that  an  improved  system  of  accounting  has 
recently  been  installed  by  a  firm  of  expert  accountants.  We  are  also 


26 

glad  to  say  that  the  present  management  is  evidently  making  an  earnest 
effort  to  better  conditions  generally. 

We  desire  to  call  special  attention  to  the  fact  that  under  he  law  the 
Warden  and  Board  of  Control  can  pledge  the  property  of  the  prison  as 
security  for  loans  and  that  this  is  being  done  right  along.  Hundreds  of 
thousands  of  dollars  are  frequently  borrowed  in  this  way,  this  money 
usually  being  secured  from  a  New  York  bank.  We  think  this  a  very 
unsatisfactory  fiscal  policy  for  the  state  to  follow.  If  Jackson  Prison 
should  need  money  for  the  operation  of  its  industries,  it  should  be  sup- 
plied by  the  state  and  not  by  a  New  York  bank  to  whom  the  prison 
authorities  have  to  pay  over  6  per  cent  interest  for  money.  As  a  matter 
of  fart,  so  far  as  finances  are  concerned,  the  State  Prison  is  a  little 
government  unto  itself.  It  is  anything  but  good  business  for  any  agency 
of  tho  state  to  be  permitted  to  pledge  the  property  of  the  state  as  security 
for  loans  and  the  law  authorizing  it  should,  in  our  opinion,  be  repealed 
immediately. 

At^ntion  is  also  called  to  the  wholly  inadequate  fire  protection  at  the 
prison.  The  character  of  much  of  the  material  stored  at  the  prison  is 
such  that  a  fire  is  very  liable  to  start  at  any  time  from  spontaneous  com- 
bustion. We  refer  particularly  to  the  large  quantity  of  sisal  stored  at 
the  prison,  the  value  of  which  usually  runs  into  several  hundred  thousand 
dollars.  There  is  practically  no  fire  protection  except  that  which  might 
possibly  be  furnished  by  the  city  of  Jackson.  The  prison  should  forth- 
with be  fully  equipped  with  the  necessary  apparatus  to  successfully  pro- 
tect the  property  of  the  prison  from  destruction  by  fire.  It  is  pertinent 
to  remark  that  only  a  few  years  ago  fire  at  the  prison  destroyed  seventy- 
five  thousand  dollars'  worth  of  sisal,  much  of  which  could  have  been 
saved  had  the  prison  been  properly  equipped  to  meet  such  an  emergency. 

College  of  Mines: 

The  conditions  at  the  College  of  Mines  are  somewhat  of  a  problem. 
This  college  is  being  splendidly  conducted  and  the  graduates  it  turns  out 
are  in  much  demand  as  mining  engineers.  However,  the  per  capita  cost 
of  -  maintaining  the  college  is  large  as  is  also  the  amount  of  money 
invested  by  the  state  in  the  college.  The  number  of  pupils  is  very  small 
and  the  number  of  instructors  proportionately  large.  It  has  occurred 
to  11  «*  that  a  part  of  this  school  might  be  used  for  vocational  training, 
in  addition  to  teaching  mining  engineering.  The  Superintendent  of 
Public  Instruction  has  assured  us  that  there  is  much  demand  in  the 
state  for  vocational  teachers,  and  if  the  College  of  Mines  at  Houghton 
would  take  up  this  branch  of  work,  in  addition  to  what  it  is  now  doing, 
it  undoubtedly  would  be  of  benefit  to  the  state.  At  any  rate,  it  is  a 
matter  that  might  well  receive  legislative  consideration.  The  College  of 
Mines  is  a  very  useful  school  and  must,  of  course,  be  maintained ;  at  the 
same  time  there  is  no  good  reason  why  the  buildings  at  the  school  should 
not  be  utilized  fully  for  educational  purposes. 

University  of  Michigan  : 

The  University  of  Michigan  is  also  being  well  conducted.  Its  affairs 
are  in  the  hands  of  exceedingly  efficient  men  and,  from  both  an  educa- 
tional and  business  standpoint,  it  is  a  credit  to  the  state.  It  is  needless 


27 

to  say  that  the  University  of  Michigan  is  classed  among  the  leading  edu- 
cational institutions  of  the  world.  Many  of  its  graduates  have  attained 
high  places  in  governmental,  industrial  and  financial  activities. 

The  accounting  system  maintained  by  the  University  is  all  that  could 
be  desired.  Any  citizen  of  Michigan,  desiring  to  know,  can  very  readily 
ascertain  the  source  of  all  income  and  the  purposes  of  all  expenditure, 
in  minutest  detail,  by  reference  to  these  accounts. 

We  find  that  the  Board  of  Regents  gives  unusual  attention  to  the 
administrative  affairs  of  the  University  and  maintains  a  business  system 
which  is  a  credit  to  them. 

Michigan  should  be,  and  is,  proud  of  its  University. 

State  Normal  Schools: 

We  desire  to  especially  commend  the  efficient  manner  in  which  our 
state  normal  schools  are  being  conducted.  Our  state  normal  schools  are, 
as  is  well  known,  under  the  supervision  of  the  State  Board  of  Education. 
We  do  not  know  wherein  there  could  be  any  improvement  in  the  conduct 
of  these  schools  except  in  the  purchasing  and  accounting  part  of  it. 
This  weakness,  however,  is  no  fault  of  those  administering  the  affairs  of 
the  schools  but  is  the  result  of  statutory  weakness.  With  a  centralized 
system  of  purchasing  put  into  effect  and  a  uniform  system  of  accounting, 
these  institutions  would  be  placed  upon  a  high  plane  of  efficiency,  and 
we  hnve  no  other  recommendations  to  make  in  regard  to  them. 

Farms  : 

There  is  doubt  in  the  minds  of  the  commission  as  to  the  advisability 
of  our  state  institutions  maintaining  large  farms.  We  refer  particularly 
to  institutions  whose  inmates  cannot  be  employed  because  of  physical 
disabilities.  We  also  doubt  the  advisability  of  any  institution  being 
permitted  to  buy  up  large  acreage  of  poor  land.  We  have  an  instance 
of  this  in  the  case  of  the  State  Prison  at  Jackson.  This  prison  owns 
over  four  thousand  acres  of  land,  considerable  of  which  is  anything  but 
good  land.  This  is  evidenced  by  the  fact  that  last  year  the  prison  lost 
several  thousand  dollars  from  the  operation  of  its  farms.  This  is  another 
matter  that  might  well  receive  consideration  at  the  hands  of  the  legis- 
lature. 

STATE  DEPARTMENTS 

In  our  investigation  of  the  various  state  offices,  we  found  that  on  the 
whole  they  were  being  conducted  fairly  well,  considering  the  inadequate 
remuneration  paid  the  clerical  help.  However,  there  is  duplication  of 
effort,  a  lack  of  labor-saving  equipment  and  inattention  to  many  things 
which,  if  given  attention,  would  increase  the  efficiency  of  the  offices  and, 
consequently,  lessen  their  costs.  In  some  of  the  offices  we  found  that 
they  were  following  the  same  methods  of  doing  the  work  as  prevailed 
many  years  ago,  notwithstanding  that  many  labor-saving  devices  have 
been  developed.  For  instance,  in  some  of  the  offices  many  thousands  of 
envelopes  were  addressed  each  month,  with  pen  and  ink,  from  permanent 
lists  of  names,  this  work  requiring  the  constant  attention  of  one  or  two 
clerks,  whereas  one  addressing  machine  would  do  the  work  of  half  a 
dozen  offices.  We  are  glad  to  say,  however,  that  in  a  considerable  meas- 


28 

ure  this  condition  has  been  remedied  and  thus  a  saving  of  money  will 

result. 

There  is  considerable  duplication  of  work  which,  of  course,  entaili 
duplication  of  expense  and  it  should  be  stopped  effectively.  In  the  De- 
partment of  State  there  is  a  division  known  as  the  "Vital  Statistics  Divi- 
sion." This  division  collects  statistics  relative  to  deaths,  births,  mar- 
riages and  divorces.  These  statistics  are  compiled  and  published  in 
monthly  bulletins  and  also  in  an  annual  report.  So  far  as  the  record  of 
deaths  is  concerned,  the  State  Board  of  Health  gathers  practically  the 
same  information  as  does  the  Vital  Statistics  Division  and  this  informa- 
tion is  also  published  in  bulletins  and  the  annual  report  of  the  State 
Board  of  Health.  The  commission  can  see  no  good  reason  for  this  dupli- 
cation of  work  in  these  two  departments. 

In  the  matter  of  making  inspections  provided  for  by  law,  it  is  often  the 
case  that  the  state  will  send  an  inspector  to  a  locality  to  make  an  inspec- 
tion as  to  sanitary  conditions,  another  inspector  1o  the  same  locality  to 
make  inspection  as  to  adulterations  of  food  commodities.  It  is  suggested 
that  one  inspector  could  do  the  work  of  the  two  now  engaged.  Inspec- 
tions as  to  fire  risks  and  inspections  as  to  fire  escapes  are  now  divided 
between  the  Labor  Department  and  the  Insurance  (Fire  .Marshal's) 
Department.  We  believe  that  those  inspections  might  well  be  made  by 
the  same  inspector.  Oftentimes  it  hapi>ens  that  two  inspectors  will  be 
sent  by  the  state  to  the  same  place  for  the  purpose  of  making  these 
inspections  when  one  inspector  could  do  the  work  quite  as  well  as  two. 
Comment  on  the  duplication  of  work  in  connection  with  compiling  and 
printing  of  annual  reports  will  be  found  in  this  report  under  the  head  of 
"State  Printing." 

The  clerical  force  in  the  employ  of  the  state  will,  we  believe,  measure 
up,  so  far  as  efficiency  is  concerned,  with  a  similar  force  employed  any- 
where receiving  the  same  compensation.  It  is  true  that  there  are  some 
among  them  who  do. not  measure  up  to  the  standard  of  clerks  that  the 
state  should  have  in  its  employ;  on  the  other  hand,  there  are  many 
clerks  who,  from  long  years  of  service,  have  become  exceedingly  proficient 
in  their  work  and  are  worth  much  more  to  the  state  than  they  are  being 
paid.  We  believe  that  if  the  state  paid  a  fair  compensation,  it  would 
not  only  be  able  to  retain  in  its  service  the  most  efficient  of  its  present 
clerical  force,  but  would  also  be  in  position  to  secure  efficient  help  in  the 
future  whenever  it  needed  it.  It  is  very  poor  economy  for  the  state  to 
pay  low  salaries  to  its  employes  at  the  expense  of  efficient  service.  The 
state  should  be  willing  to  pay  the  market  price  of  labor;  and  this  is  just 
what  it  has  not  been  doing  for  some  time.  The  result  has  been  that  many 
of  its  most  efficient  employes  have  left  the  service  of  the  state  to  enter 
the  employ  of  private  enterprises  at  much  larger  compensation  than  the 
state  was  paying  them.  This  we  believe  to  be  a  distinct  loss  of  money  to 
the  taxpayers  of  the  state.  Something  surely  should  be  done  by  way  of 
placing  these  clerks  upon  a  fair  and  reasonable  salary  basis,  sufficiently 
high  to  meet  the  present  day  economic  conditions. 

Under  the  present  graded  salary  law  a  clerk-  when  first  entering  the 
employ  of  the  state,  can  only  be  paid  at  the  rate  of  $800.00  a  year.  No 
matter  how  efficient  this  employe  may  prove  to  be,  he  cannot  receive  an 
increase  in  salary  for  a  period  of  three  months.  The  maximum  amount 
that  he  can  ever  receive,  no  matter  if  he  has  been  in  the  employ  of  the 


29 

state  for  twenty-five  years,  is  only  thirteen  hundred  dollars  a  year,  and 
the  average  salaries  paid  by  any  department  cannot  exceed  eleven  hun- 
dred dollars  a  year.  With  the  present  high  cost  of  living,  it  will  readily 
be  seen  that  a  man  with  a  family,  earning  only  eleven  hundred  dollars  a 
year,  has  a  very  difficult  task  to  make  the  two  ends  meet;  and  it  is  doubt- 
ful that  he  can  possibly  do  so.  We,  therefore,  recommend  that  the  graded 
salary  law  be  amended  so  as  to  provide  a  maximum  salary  of  fifteen  hun- 
dred dollars,  an  average  salary  of  twelve  hundred  dollars,  and  the  removal 
of  the  minimum  salary.  This,  we  believe,  will  be  more  nearly  a  living 
wage  for  the  state  to  pay  its  employes.  Surely  no  taxpayers  in  the  state 
will  object  to  the  employes  receiving  a  rate  of  compensation  that  will 
enable  them  to  properly  meet  their  living  expenses. 

Departmental  clerks  now  are  entitled,  under  the  law,  to  twenty-four 
days'  vacation  each  year  with  pay.  We  believe  this  to  be  excessive.  The 
usual  rule  among  private  business  enterprises  is  to  give  employes  not  to 
exceed  two  weeks'  vacation  with  pay.  There  is  no  good  reason  why  state 
employes  should  receive  more  vacation  than  those  working  in  private 
establishments.  This  law  should  be  changed  so  as  to  provide  for  a  two 
weeks'  vacation  instead  of  twenty-four  days.  This  changing  of  the  vaca- 
tion period  will  go  a  good  ways  toward  offsetting  the  increase  in  clerical 
salaries  above  recommended. 

Bank  examiners,  upon  entering  the  service  of  the  state,  receive  a  salary 
of  seventeen  hundred  dollars  a  year.  This  salary  may  be  increased  at 
the  rate  of  two  hundred  dollars  a  year  until  a  maximum  of  twenty-five 
hundred  dollars  a  year  is  reached.  Thereafter  there  can  be  no  increase 
in  salary  under  the  present  law,  no  matter  how  efficient  and  valuable 
these  men  are  in  the  state's  service.  The  result  is  that  these  examiners 
are  constantly  leaving  the  employ  of  the  state  to  enter  the  service  of 
banking  institutions  who  will  pay  larger  salaries  than  can  now  be  paid 
by  the  state.  This  condition  of  affairs  is  a  distinct  economic  loss  to  the 
people  of  the  state,  especially  when  it  is  considered  that  these  men  have 
been  schooled  in  the  banking  business  at  state  expense.  It  is  pertinent 
to  remark  that  one  of  the  examiners,  at  least,  employed  by  the  Securities 
Commission,  receives  a  salary  of  thirty-five  hundred  dollars  a  year,  or  one 
thousand  dollars  a  year  more  than  the  maximum  salary  paid  a  bank 
examiner;  another  instance  of  gross  inequality  in  the  payment  of  salaries. 

Special  attention  is  called  to  the  inequality  of  the  salaries  paid  the 
various  executive  officers  of  the  state,  their  deputies  and  secretaries.  A 
table  showing  these  salaries  will  be  found  in  the  statistical  part  of  this 
report.  The  gross  inequality  in  the  distribution  of  these  salaries  should 
immediately  be  remedied.  There  is  no  good  sense,  for  instance,  in  the 
state  paying  the  Deputy  Secretary  of  State,  the  Deputy  State  Treasurer 
and  the  Deputy  Auditor  General  twenty-five  hundred  dollars  a  year 
when  the  secretaries  of  some  of  the  commissions  receive  three  thousand 
dollars  a  year,  and  the  Director  of  the  Securities  Commission  four  thou- 
sand dollars  a  year.  The  Department  of  State  and  the  Auditor  General's 
Department  are  the  two  largest  departments  of  the  state  government, 
and  the  State  Treasurer's  Department  is  of  prime  importance  in  that 
through  it  all  state  moneys  are  received  and  disbursed.  Surely  the  depu- 
ties in  these  three  offices  should  receive  as  large  a  salary  as  those  holding 
any  other  office  immediately  below  in  grade  the  office  of  chief  executive. 
It  will  also  be  noted  that  the  Deputy  Commissioner  of  Banking,  which 


30 

is  one  of  the  most  important  positions  in  the  state's  service,  receives  only 
twenty-five  hundred  dollars  a  year,  while  the  first  Deputy  Insurance 
Commissioner  receives  three  thousand  dollars  a  year. 

The  state  constitution  fixes  the  salaries  of  nearly  all  the  elective  state 
officers.  The  Governor  and  the  Attorney  General  each  receives  a  salary 
of  five  thousand  dollars  a  year.  The  Secretary  of  State,  State  Treasurer 
and  the  Auditor  General  each  receives  a  salary  of  twenty-five  hundred 
dollars  a  year.  The  salary  of  the  Superintendent  of  Public  Instruction, 
which  is  fixed  by  statute  and  not  by  the  state  constitution,  is  four  thou- 
sand dollars  a  year.  The  salary  paid  the  Secretary  of  State,  State  Treas- 
urer and  the  Auditor  General  should,  in  all  fairness,  be  equal  to  that  now 
paid  to  the  Superintendent  of  Public  Instruction.  Each  of  these  three 
state  departments  transacts  a  large  volume  of  business  which  requires 
the  almost  constantly  careful  attention  of  the  executive  head.  Indeed, 
in  the  case  of  the  Auditor  General's  department,  at  leasl,  the  present 
executive  head  devotes  his  entire  time  to  the  duties  of  his  oflice  and  is  one 
of  the  most  efficient  officials  the  state  ever  had  in  its  service.  The  Secre- 
tary of  State  and  the  State  Treasurer,  in  addition  to  their  duties  as  such, 
are  members  of  the  Board  of  State  Auditors  in  which  capacity  they  are 
required  to  discharge  many  additional  duties.  It  does  not  seem  possible 
that  the  people  of  the  state  would  refuse  to  grant  a  reasonable  salary  to 
these  state  officers,  provided  they  shall  be  fully  informed  of  the  important 
duties  the  heads  of  these  three  departments  have  to  perform.  At  any  rate, 
there  should  be  equality  and  not  inequality  in  fixing  the  salaries  of  state 
officers.  The  legislature,  therefore,  would  do  well  to  equalize  the  salaries 
paid  state  officers  and  employes  so  that  each  would  receive  a  fair  wage 
according  to  character  of  service  he  performs. 

More  complete  information  relative  to  the  various  ollices  will  be  found 
in  the  stenographic  reports  of  the  examination  of  such  offices,  contained 
herein,  and  in  the  statistical  part  of  the  report  in  which  will  be  found 
tabulations  relating  to  the  cost  of  these  offices  and  the  per  cent  of  increase 
and  decrease,  covering  a  period  of  years. 


STATUTORY  CHANGES 

In  addition  to  the  foregoing  recommendations  for  a  budget  system, 
uniform  accounting,  improved  control  of  printing,  a  central  purchasing 
agency  and  certain  recommendations  relative  to  departmental  work,  we 
respectfully  call  attention  to  the  following  matters  for  legislative  con- 
sideration : 

Dairy  and  Food  Activities: 

Under  the  present  laws  the  extension  work  in  dairy  industries  is  now 
divided  between  the  Dairy  and  Food  Department  and  the  Michigan  Agri- 
cultural College.  It  is  suggested  that  this  work  all  be  done  by  the 
college. 

The  work  of  inspecting  commercial  feeding  stuff  now  done  by  the 
Michigan  Agricultural  College  should  be  transferred  to  the  State  Dairy 
and  Food  Department. 


31 

Deeds  to  State  Property: 

Deeds  to  state  property  are  now  in  the  custody  of  different  depart- 
ments thus  causing  a  good  deal  of  confusion.  There  should  be  enacted 
a  law  requiring  that  all  deeds  be  deposited  either  with  the  State  Treas- 
urer or  with  the  Auditor  General. 

Examination  of  State  Lands: 

Under  the  present  system  lands  deeded  to  the  state  and  subsequently 
deeded  to  purchasers  are  appraised  by  two  distinct  departments  of  the 
state  government,  namely,  the  Public  Domain  Commission  and  the 
Auditor  General.  This. is  a  duplication  of  effort  and  of  expense.  The 
law  should  provide  for  this  appraisal  to  be  made  by  one  department. 

Game  Laws: 

Something  should  be  done  by  way  of  legislation  to  protect  the  citizens 
of  Michigan  from  the  grabbing  of  fish  from  our  waters  by  foreign  corpora- 
tions which  come  into  the  state,  hire  the  fishermen  and  contract  for  all 
the  fish  they  catch.  Nearly  all  fish  caught  in  our  waters  go  to  the  large 
producers  residing  outside  of  the  state  of  Michigan,  most  of  which  is 
put  in  cold  storage  and  later  is  shipped  back  to  the  state  for  sale  to  our 
citizens  at  three  or  four  times  the  price  paid  the  fishermen. 

For  several  years  there  was  a  law  on  our  statutes  which  provided  that 
fish  caught  in  inland  rivers  and  lakes  of  this  state  could  not  be  shipped 
out  of  the  state.  This  law  evidently  was  enacted  for  the  purpose  of 
giving  the  citizens  of  Michigan  the  benefit  of  the  fish  caught  in  our  inland 
waters.  For  some  reason  this  law  was  repealed.  We  suggest  its 
re-enactment. 

Under  the  present  law  blank  hunting  licenses  are  sent  to  each  county 
clerk  to  be  sold  to  hunters,  and  for  the  sale  of  which  he  receives  a  com- 
mission of  ten  per  cent.  The  balance  of  the  fees  the  county  clerk  collects 
are  supposed  to  be  turned  in  to  the  state  each  month,  together  with  cer- 
tification of  the  number  of  licenses  issued.  At  the  end  of  the  year  the 
stubs  and  unused  licenses  are  sent  to  the  game  warden.  This  system  has 
proven  very  unsatisfactory,  the  state  having  lost  money  and  having  been 
put  to  considerable  expense  in  making  collections.  This  is  partly  due  to 
a  lack  of  a  proper  accounting  system  and  partly  due  to  neglect  on  the 
part  of  some  of  the  county  clerks.  This  system  should  be  changed  so 
that  when  a  supply  of  licenses  are  sent  to  a  county  clerk,  report  thereof 
should  be  sent  to  the  Auditor  General  by  the  Game  Department.  The 
Auditor  General  should  then  charge  the  county  with  the  amount  of  fees 
that  would  be  collected  from  the  sale  of  the  licenses.  Upon  remittance 
of  the  funds  collected  from  the  licenses  issued  and  the  return  of  the 
unissued  'licenses  and  stubs,  the  county  would  then  be  credited  and  the 
account  against  the  county  balanced.  In  this  way,  the  county  would  be 
held  responsible  for  a  proper  accounting  of  these  license  moneys. 

The  fire  protection  division  of  the  Game  Warden's  Department  main- 
tains two  offices,  one  in  the  lower  peninsula  and  one  in  the  upper  penin- 
sula. The  Budget  Commission  sees  no  good  reason  for  the  maintenance 
of  two  such  offices.  The  office  maintained  in  the  upper  part  of  the  lower 
peninsula  is  quite  capable  of  looking  after  all  the  work.  The  upper 
peninsula  office  was  only  recently  established,  and  was  established  by  the 


32 

Game  Warden  taking  over  the  work  formerly  done  by  the  Northern  Fire 
Protection  Company,  a  private  concern  located  in  the  city  of  Marqnette. 
The  maintenance  of  this  upper  peninsula  office  costs  the  state  several 
thousand  dollars  a  year,  twice  as  much  as  the  similar  office  in  the  lower 
peninsula. 

Michigan  Fish  Commission: 

There  is  no  good  reason  for  the  state  maintaining  the  Fish  Commission 
as  at  present  constituted.  The  work  now  done  by  the  Fish  Commission 
can  be  done  by  the  Game  Warden's  Department  at  a  much  less  expense. 
We,  therefore,  suggest  that  the  Fish  Commission  be  abolished  and  its 
activities  transferred  to  the  Game  Warden's  Department.  The  opera- 
tions of  the  Fisli  Commission  have  not  been  very  efficient,  resultant 
partly  from  inattention  to  duties  on  the  part  of  some  members  of  the 
commission,  and  partly  from  weaknesses  in  the  governing  statute.  Last 
year  there  were  no  meetings  of  the  commission  between  the  months  of 
May  and  October,  and  from  August,  11)15,  to  October,  11)17,  covering  a 
period  of  twenty-six  months,  there  were  only  six  meetings  of  the  com 
mission  held.  Of  these  meetings  one  member  attended  all  of  them, 
another  member  attended  five  meetings  and  the  other  member  attended 
only  two  meetings.  None  of  the  records  of  the  proceedings  of  these 
meetings  have  been  signed  by  any  member  of  the  commission.  It  is  quite 
evident,  therefore,  that  the  work  of  the  commission  lias  been  largely 
handled  and  conducted  by  the  secretary  thereof. 

A  large  amount  of  money  conies  into  the  hands  of  the  commission 
every  year,  anywhere  from  forty  to  fifty  thousand  dollars,  from  non-resi- 
dent licenses.  Usually  an  average  of  several  thousand  dollars  a  month 
is  in  the  hands  of  the  treasurer  of  the  commission  until  the  end  of  the 
year  when  it  is  turned  into  the  state  treasury,  or  supposed  to  be  turned 
in.  We  are  sorry  to  say  that  some  difficulty  has  been  had  by  the  audit- 
ing department  of  the  state  to  secure  a  prompt  turning  over  to  the  state 
treasury  of  these  moneys. 

In  the  past  there  has  been  a  distinct  waste  of  money  at  several  of  the 
state  hatcheries  in  the  laying  out  of  extensive  flower  beds,  etc.  At  some 
of  these  hatcheries  it  requires  one  man  almost  constantly  to  look  after 
the  flower  beds,  shrubberies,  lawns,  etc.,  and  oftentimes  there  are  two 
men  required.  No  one  seems  to  know  just  what  the  value  of  these 
hatcheries  and  other  property  owned  by  the  Fish  Commission  is.  The 
appraisal  of  the  same  is  usually  left  to  the  local  superintendent  at  the 
hatchery.  The  purchasing  done  in  behalf  of  the  commission  is  in  charge 
of  the  local  superintendent  at  the  hatchery  and  for  the  purpose  of  making 
purchases,  advances  are  made.  None  of  the  superintendents,  however, 
are  required  to  furnish  bonds. 

Under  the  present  system  the  Fish  Commission  issues  the  licenses, 
collects  the  fees  and  then  its  duty  is  ended.  It  is  left  to  the  Game  War- 
den's Department  to  enforce  the  law.  This  surely  is  as  bungling  a  sys- 
tem as  could  be  devised  and  certainly  should  be  remedied. 

The  Game  Warden's  Department  is  now  being  conducted  in  a  com- 
mendable manner  and  it  is  certain  that  the  work  now  done  by  the  Fish 
Commission,  if  transferred  to  the  Game  Warden's  Department,  will  be 
well  done  by  the  present  game  warden,  whose  services  to  the  state  are  of 
an  exceptionally  efficient  character. 


33 

Securities  Commission: 

Attention  is  called  to  Section  11945,  Compiled  Laws  of  1915,  relating 
to  fees  collected  by  and  the  expenses  of  the  Michigan  Securities  Commis- 
sion. This  law  gives  the  commission  privileges  not  enjoyed  by  any  other 
board  or  commission  that  collects  fees  and,  under  the  system  adopted  by 
the  commission,  it  is  difficult  for  the  Auditor  General  to  gain  the  knowl- 
edge he  should  have  relative  to  the  total  amount  of  fees  collected  or  the 
expenses  of  the  commission,  these  fees  being  deposited  to  the  credit  of  the 
deposit  account  of  the  commission  and  certain  expenses  paid  from  that 
fund.  In  some  cases  the  expenses  are  paid  from  the  fees  collected  and 
the  balance  deposited  to  the  deposit  account  of  the  commission.  This 
condition  of  affairs,  of  course,  will  be  cured  providing  the  legislature 
enacts  the  budget  bill  we  have  prepared. 

Under  the  present  law  governing  the  commission,  it  has  the  power  to 
appoint  a  secretary  at  a  salary  of  $2,500.00  a  year  and  can  employ  such 
other  and  further  assistants  as  may  be  necessary  to  carry  out  the  pro- 
visions of  the  law,  the  salaries  of  such  assistants  to  be  fixed  by  the  com- 
mission, subject  to  the  approval  of  the  Board  of  State  Auditors.  In 
order  that  there  may  be  uniformity,  it  is  suggested  that  the  salaries  of 
the  clerical  force  of  this  commission  be  made  subject  to  the  graded  salary 
law,  as  are  those  of  the  clerks  in  other  state  departments;  and  that  the 
salaries  of  the  executive  officers  and  examiners  be  fixed  by  law. 

Highivay  Department  Activities: 

Under  the  Covert  law,  large  sums  of  money  are  received  from  the  sale 
of  bonds.  This  money  is  turned  over  to  the  county  treasurers  and  by 
them  deposited  in  banks  designated  by  the  State  Highway  Commissioner 
or  by  the  Board  of  Supervisors.  No  bonds  are  required  by  law  from  the 
County  Treasurers  as  security  for  the  safe  handling  of  this  money,  nor 
are  any  bonds  required  by  law  from  the  depositories.  The  law  should  be 
amended  requiring  that  this  be  done.  The  Highway  Commissioner's 
bond  is  in  the  sum  of  only  $5,000.00  This  is  wholly  inadequate  for  the 
large  sum  of  money  passing  through  the  hands  of  the  Commissioner 
<1  iiring  the  year.  The  estimated  expenditures  of  the  department  this 
year  are  from  two  to  two  and  one-half  million  dollars,  one-half  million 
of  which,  it  is  estimated,  will  be  expended  under  the  Covert  law. 

Under  the  present  law  bonds  issued  for  highway  purposes  are  certified 
to  by  the  Highway  Commissioner  only.  We  recommend  that  the  law  be 
changed  so  that  such  bonds  be  also  certified  by  the  Governor  and  by  the 
Attorney  General  as  to  their  validity. 

Banking  Department  Activities: 

The  present  banking  law  places  a  limitation  upon  the  number  of  clerks 
that  may  be  employed  by  the  banking  department,  the  limitation  being 
five  clerks.  The  efficiency  of  the  department  has  suffered  considerably 
because  of  this  statutory  limitation.  The  work  of  the  department  is 
constantly  increasing  and  there  is  no  good  reason  for  placing  any  such 
limitation  upon  the  number  of  its  employes. 

Attention  has  already  been  called  to  the  inadequate  salaries  paid  the 
bank  examiners  employed  by  the  department. 


34 

State  Tax  Commission: 

Under  the  present  law  in  case  the  State  Tax  Commission,  acting  upon 
petition,  conducts  a  review  of  the  equalized  value  of  assessment  districts 
in  a  county,  the  cost  of  such  review  is  borne  by  the  state.  This  is  decid- 
edly wrong.  The  expense  of  making  such  a  review  should  be  paid  by  the 
assessment  districts  making  complaints.  It  is  more  than  unjust  to  ask 
the  taxpayers  of  Ingham  County,  for  instance,  to  help  pay  the  cost  of  a 
review  of  the  equalized  value  of  the  various  assessment  districts  in  the 
county  of  Jackson,  which  review  is  made  on  complaint  of  a  township  or 
city  in  the  county  of  Jackson.  We  recommend  that  the  law  be  amended 
so  as  to  remedy  this  condition  of  affairs. 

Advisory  Board  in  the  Matter  of  Pardons: 

Attention  is  called  to  the  statutory  limitation  of  two  hundred  days  for 
which  the  State  Pardon  Board  can  receive  compensation.  It  is  impos- 
sible, with  the  large  number  of  cases  which  now  come  annually  before 
the  board,  for  it  to  give  such  cases  proper  consideration  within  this  time 
limit.  The  result  is  that  either  the  board  must  work  without  compensa- 
tion or  the  convicts  applying  for  parole  are  not  given  the  full  considera- 
tion that  they  should  receive.  The  function  of  the  Pardon  Board  is 
important  and  the  effect  of  its  work,  if  efficiently  performed,  is  far 
reaching  in  that  opportunity  is  given  a  deserving  convict  to  redeem  him- 
self and  become  a  useful  member  of  society.  We  think  it  is  poor  policy 
for  the  state  to  hamper  this  board  in  the  discharge  of  its  duties  by  such  a 
statutory  limitation.  The  board  should  be  permitted  to  give  ample  time 
for  the  consideration  of  every. application  for  parole  coming  before  it; 
and  the  state  certainly  should  not  require  the  members  of  the  board  to 
discharge  any  part  of  their  duties  without  compensation.  It  is  inter- 
esting to  note  that  the  number  of  cases  considered  by  the  board  has  prac- 
tically doubled  during  the  last  five  years. 

State  Auditing: 

The  manner  in  which  claims  against  the  state  are  now  being  audited 
is  a  decidedly  mixed  affair — in  that  it  is  done  by  two  distinct  depart- 
ments of  the  state  government.  Part  of  the  claims  are  audited  and 
allowed  by  the  Board  of  State  Auditors  and  a  part  of  them  by  the 
Auditor  General.  Bills  for  expenses  incurred  by  state  departments, 
boards  and  commissions,  which  are  payable  from  appropriations,  are 
audited  and  allowed  by  the  Auditor  General,  and  those  which  are  payable 
from  the  general  fund  are  audited  and  allowed  by  the  Board  of  State 
Auditors.  The  result  is  that  the  expense  bills  of  a  single  department  are 
divided  for  audit  and  allowance  between  two  auditing  departments  of 
the  state 'and  consequently  there  is  more  or  less  duplication  of  work  and 
expense  in  connection  therewith.  It  is  a  clumsy  procedure  to  say  the 
least  and  is  the  result  of  legislation  enacted  without  sufficient  considera- 
tion of  its  probable  workability  and  its  relation  to  modern  business 
methods.  There  should  be  but  one  department  for  the  audit  of  the  ordi- 
nary claims  against  the  state  and,  in  our  opinion,  the  department  that 
should  be  charged  with  this  work  is  that  of  the  Auditor  General,  who, 
being  under  the  law  the  warrant  officer  of  the  state,  must  of  necessity, 
before  he  draws  his  warrant  for  the  payment  of  any  bill,  examine  closely 


35 

and  audit  such  bill  to  make  sure  that  moneys  are  not  being  diverted  from 
their  proper  channels.  As  it  is  now,  bills  audited  by  the  Board  of  Btate 
Auditors  are  required  to  be  sent  to  that  board  in  duplicate,  one  copy  of 
which  is  retained  by  the  board  and  the  duplicate  copy  turned  over  to  the 
Auditor  General.  Furthermore,  the  Board  of  State  Auditors  meets  infre- 
quently with  the  result  that  the  state's  business  in  regard  to  the  audit 
and  payment  of  claims  is  not  given  the  prompt  attention  it  demands; 
whereas,  if  all  bills  were  sent  to  the  Auditor  General  direct  for  audit 
they  would  receive  immediate  attention.  Extraordinary  claims  against 
the  state,  all  claims  relating  to  any  contract,  should,  of  course,  still  be 
handled  by  the  Board  of  State  Auditors,  but  the  ordinary  expenses  of 
the  state,  incurred  by  the  various  departments,  boards  and  offices,  might 
better  be  handled  by  the  Auditor  General. 

We  believe,  also,  that  all  claims  of  every  character  against  the  state 
should  be  subject  to  audit  by  the  state's  auditing  department  before  they 
are  paid.  At  the  present  time  there  are  a  few  offices  of  the  state  which 
pay  their  own  expenses  without  such  audit. 

Consolidation  of  Offices: 

Because  of  numerous  boards,  commissions,  etc.,  there  is  considerable 
^overlapping  of  duties  and  the  utmost  confusion  in  the  minds  of  the 
public  as  to  what  the  duties  of  these  various  boards  and  commissions 
are.  We  believe  that  by  consolidating  some  of  these  offices,  at  least,  there 
will  result  not  only  greater  efficiency,  but  also  a  considerable  saving 
of  money  to  the  taxpayers  of  the  state.  It  will  also  result  in  consolidating 
similar  activities  under  one  head  and  surely  this  in  itself  would  be  a 
decided  improvement.  We,  therefore,  recommend: 

That  the  present  Railroad  Commission  and  Securities  Commission  and 
the  Corporation  Division  of  the  Secretary  of  State's  Department  be 
abolished  and  the  powers  exercised  and  duties  discharged  by  these  two 
commissions,  and  by  the  said  Corporation  Division,  be  transferred  to  a 
Corporation  Commission  to  consist  of  three  members  to  be  appointed  by 
the  Governor.  By  doing  this  all  matters  relating  to  public  service  cor- 
porations and  private  corporations  will  be  placed  in  one  department  of 
the  state  government  instead  of  in  three  departments  as  at  present 
obtains.  The  way  corporation  work  is  now  handled  by  the  state  results 
in  considerable  duplication  of  effort.  The  Railroad  Commission  has 
supervision  over  the  issue  of  bonds  and  other  securities  of  public  service 
corporations;  the  Securities  Commission  has  supervision  over  the  issue 
of  bonds  and  other  securities  of  private  corporations,  and  the  Corpora- 
tion Division  of  the  Department  of  State  receives  for  filing  and  record 
articles  of  association  of  all  corporations,  also  amendments  to  articles  of 
association,  and  receives  for  filing  the  annual  reports  of  such  corpora- 
tions. It  is  pertinent  to  say  that,  under  the  present  system,  a  corporation 
is  required  to  file  a  report  with  the  Secretary  of  State  and  is  also  required 
to  file  a  similar  report  with  the  Securities  Commission.  This  duplicate 
report  is  checked  over  by  two  distinct  departments,  entailing  a  consider- 
able amount  of  work  by  each  department  and,  consequently,  double 
expense  to  the  state.  When  a  corporation  files  its  articles  of  association 
with  the  Secretary  of  State  and  these  articles  show  intangible  values  as 
a  part  of  its  paid-in  capital  stock,  the  Secretary  of  State  has  no  means  of 
ascertaining  how  much  water  is  contained  in  such  intangible  values.  We 


36 

believe  that  it  is  important,  as  a  protection  to  the  investing  public  of  our 
state,  that  when  such  a  condition  is  presented  to  the  state,  it  should  be 
incumbent  upon  the  state  to  make  an  investigation,  such  as  is  now  done 
by  the  Securities  Commission  when  an  issue  of  bonds  or  other  securities 
is  contemplated  by  any  private  corporation.  All  property  which  consti- 
tutes a  part  of  the  paid-in  capital  of  a  corporation  should  be  subject  to 
appraisal  whether  or  not  an  issue  of  bonds  or  stock  to  the  general  public 
is  contemplated  by  the  original  incorporators.  Unless  this  is  done,  there 
is  danger  that  subsequent  distribution  of  worthless  stock  will  be  made  to 
the  public.  We  believe  that  this  new  department  should  have  charge  of 
all  this  work  so  that  if  the  general  public  wanted  to  know  anything  about 
any  class  of  corporations,  it  could  get  the  information  from  one  depart- 
ment of  the  state  government.  It  is  our  opinion  that  this  consolidation 
would  effect  a  saving  in  money  and  most  surely  would,  from  the  stand- 
point of  convenience,  be  of  great  benefit  to  the  people  of  the  state. 

It  is  pertinent  to  call  attention  to  certain  matters  relating  to  the 
activities  of  the  State  Railroad  Commission.  Public  utilities  applying  to 
the  commission  for  authority  to  issue  stocks,  bonds,  or  notes,  are  required 
to  submit  to  an  appraisal  of  their  properties.  These  appraisals  are 
usually  made  by  Professor  Cooley  of  the  University  of  Michigan  and  a 
staff  of  engineers  which  he  employs.  From  May,  1914,  to  November.  191."). 
covering  a  period  of  eighteen  mouths,  tl\e  cost  of  these  appraisals  was 
nearly  $246,000.00.  The  cost  of  appraising  the  property  of  the  Pere 
Marquette  Railroad  was  $79,502.00  and  the  cost  of  appraising  the  prop- 
erty of  the  Detroit  United  Railway  was  si (15, (4 1.00  and  the  cost  of  mis- 
cellaneous appraisals,  $734.00.  Tliis  cost,  of  course,  is  borne  by  the  com- 
panies whose  property  is  appraised,  the  money  being  paid  direct  to  those 
employed  in  making  the  appraisals.  This  is  a  decidedly  wrong  way  for 
the  State  of  Michigan  to  transact  business.  The  companies  should  be 
billed  by  the  state  for  the  cost  of  much  appraisals  and  the  money  paid 
direct  to  the  state;  in  turn,  the  state  should  fix  the  compensation  of  all 
persons  employed  in  making  the  appraisals  and  they  should  be  paid 
accordingly  direct  from  the  state  treasury.  Any  balance  remaining  over 
and  above  the  expense  of  making  the  appraisals  should  be  credited  to  an 
appropriate  fund  in  the  state  treasury.  It  is  suggested  that  if  the  state 
had  in  its  employ  an  engineer  capable  of  handling  this  character  of  work, 
a  considerable  portion  of  the  amount  paid  for  these  appraisals  would  be 
saved  to  the  state  and,  furthermore,  it  would  be  correct  business  whereas 
the  present  method  is  anything  but  correct  business. 

Under  the  present  law  the  public  service  corporations  applying  to  the 
commission  for  approval  of  bond  issues  are  not  required  to  pay  any  fee 
to  the  state  for  such  approval.  When  an  investigation  is  found  necessary 
by  the  commission  before  such  approval  is  given,  we  believe  that  a  small 
fee  should  be  exacted  for  this  service.  For  the  first  six  months  in  1917 
the  commission  approved  the  issue  of  bonds  and  other  securities  amount- 
ing to  over  $200,000,000.00.  It  will  readily  be  seen  that  a  small  fee,  as 
low  as  one-quarter  of  one  per  cent  of  this  amount,  paid  to  the  state  as  a 
fee  would  be  quite  a  sum  of  money  and  no  corporation  making  payment 
thereof  would  be  hurt. 

We  have  a  large  number  of  boards  engaged  in  public  health  matters, 
such  as  the  Board  of  Examination  of  Barbers,  Board  of  Pharmacy,  Board 
of  Registration  of  Nurses,  Board  of  Dental  Examiners,  etc.  We  believe 


37 

all  matters  relating  to  the  public  health  should  be  centralized  in  one 
department.  The  legislature  would  do  well  to  give  this  matter  its  .careful 
consideration. 

Under  the  present  law  the  Agricultural  Division  of  the  Department  of 
State  collects  statistical  information  relative  to  the  deaf,  dumb,  blind, 
idiotic  and  epileptic.  This  work  is  strictly  a  public  health  matter  and, 
therefore,  should  be  done  by  the  State  Board  of  Health.  It  seems  ridicu- 
lous to  place  the  collection  of  information  relating  to  public  health  in 
the  hands  of  an  Agricultural  Division  of  the  state  government. 

The  State  Board  of  Health  as  at  present  constituted  consists  of  seven 
members.  This  board  might  well  be  dispensed  with  and  a  State  Commis- 
sioner of  Public  Health  substituted  therefor,  to  be  appointed  by  the 
Governor.  This  would  concentrate  supervision  of  all  public  health  mat- 
ters into  the  hands  of  one  executive  officer  of  the  state  for  whose  efficiency 
the  Governor  would  be  held  responsible. 

The  law  creating  the  office  of  State  Oil  Inspector,  we  think,  might  well 
be  amended  so  that  the  powers  now  exercised  and  duties  performed  by 
that  officer  be  transferred  to  the  State  Dairy  and  Food  Department.  In 
this  connection  we  desire  to  call  special  attention  to  the  stenographic 
report  of  the  examination  of  the  State  Oil  Inspector  contained  herein. 

Under  the  present  laws,  there  is  considerable  laboratory  work  done  by 
various  departments  of  the  state  government  at  considerable  expense. 
We  believe  it  not  only  would  be  more  convenient  but  would  result  in 
greater  efficiency  and  a  saving  of  money  if  this  laboratory  work  was 
placed  in  charge  of  one  chemist  to  be  appointed  by  the  Governor. 

Special  attention  is  called  to  the  amount  of  fees  paid  by  the  various 
state  institutions  for  the  services  of  architects,  a  record  of  which  will  be 
found  in  the  statistical  part  of  this  report.  It  should  be  noted  that  last 
year  there  was  paid  for  such  services  the  sum  of  $37,271.45  and  for  the 
five-year  period  ending  with  1917,  there  was  paid  $160,743.22.  It  is  sug- 
gested that  the  legislature  give  its  careful  consideration  to  the  desira- 
bility of  providing  by  law  for  the  employment  of  a  State  Architect. 

CHARLES  D.  THOMPSON, 
JOSEPH  W.  O'BRIEN, 
GEORGE  LORD, 
O.  C.  TOMPKINS, 
DANA  H.  HINKLEY, 
Members  of  Michigan  Budget  Commission  of  Inquiry. 


38 

PROPOSED  LAW  PROVIDING  FOR  A  BUDGET  SYSTEM. 

A  BILL 

To  establish  a  budget  system  for  the  several  activities  of  the  state  gov- 
ernment; to  create  a  state  budget  commission,  prescribing  its  powers  and 
duties ;  to  provide  that  said  commission  shall  be  furnished  with  informa- 
tion by  the  several  state  departments,  institutions,  boards,  commissions 
and  offices  relating  to  their  financial  condition  and  needs,  receipts  and 
expenditures,  and  general  affairs;  to  prescribe  the  manner  of  financing 
all  activities  of  the  several  departments,  institutions,  boards,  commis- 
sions and  offices  of  the  state  government;  to  provide  punishment  for 
refusal  or  neglect  to  comply  with  the  requirements  of  this  act;  to  provide 
for  meeting  the  expense  authorized  by  this  act;  and  to  repeal  sections 
three  and  seven  of  chapter  sixty-three,  and  sections  six  and  seven  of 
chapter  sixty-four,  compiled  laws  of  nineteen  hundred  fifteen,  insofar  as 
said  sections  relate  to  the  powers  and  duties  of  the  State  Board  of  Cor- 
rections and  Charities  and  the  making  of  reports  thereto  by  state  insti- 
tutions; and  all  other  acts  or  parts  of  acts  contravening  the  provisions 
of  this  act,  including  the  provisions  of  all  acts  making  specified  peri- 
odical (continuing)  appropriations,  excepting  act  three  hundred  three, 
public  acts  of  nineteen  hundred  seven,  and  act  one  hundred  fourteen, 
public  acts  of  nineteen  hundred  fifteen  (Act  303,  P.  A.  1907  and  Act  114, 
P.  A.  1915.)- 

The  People  of  the  State  of  Michigan  enact: 

Section  1.  The  term  "budget  system,"  established  by  this  act,  shall  be 
construed  to  be  a  systematic  plan  of  ascertaining  and  meeting  the  finan- 
cial needs  of  the  several  departments,  institutions,  boards,  commissions 
and  offices  of  the  state  government,  and  of  the  controlling  state  funds. 

Section  2.  There  is  hereby  created  in  this  state  a  budget  commission 
who  shall  exercise  such  powers  and  discharge  such  duties  as  are  herein 
prescribed. 

Section  3.  Within  thirty  days  after  this  act  takes  effect,  it  shall  be 
the  duty  of  the  Governor  to  appoint  a  qualified  elector  of  this  state,  who 
shall  be  well  versed  in  state  governmental  affairs,  a  member  of  said 
budget  commission,  who  shall  be  officially  known  as  Budget  Director. 
Said  budget  director  shall  hold  his  office  for  a  period  of  four  years  from 
and  after  the  date  of  his  appointment,  shall  devote  his  entire  time  to  the 
duties  of  his  office  and  shall  be  the  active  working  member  of  the  com- 
mission. He  shall  receive  an  annual  salary  of  four  thousand  dollars 
together  with  his  necessary  traveling  expenses  which,  when  approved  by 
the  Governor,  shall  be  paid  by  the  State  Treasurer  upon  warrant  of  the 
Auditor  General.  Said  budget  director,  together  with  the  Governor  and 
the  Auditor  General  as  ex-officio  members,  shall  constitute  the  said 
budget  commission,  of  which  the  Governor  shall  be  the  chairman.  The 
ex-officio  members  of  said  budget  commission  shall  each  receive  his  actual 
expenses  incurred  while  engaged  in  the  discharge  of  his  duties  which, 
when  approved  by  the  budget  director,  shall  be  paid  by  the  State  Treas- 
urer upon  warrant  of  the  Auditor  General.  Said  commission  may  engage 
the  services  of  such  expert  assistants  and  such  clerical  help  as  shall  be 
necessary  to  carry  out  the  provisions  of  this  act  and  shall  fix  their  com- 
pensation, which  compensation,  when  approved  by  the  budget  director, 


39 

shall  be  paid  by  the  State  Treasurer,  upon  warrant  of  the  Auditor 
General. 

Section  4.  Said  budget  commission  shall  have  the  power,  and  it  is 
hereby  directed,  to  obtain  from  the  several  state  departments,  institu- 
tions, boards,  commissions  and  offices,  on  appropriate  forms  prescribed 
by  the  commission,  on  or  before  the  fifteenth  day  of  September  in  ench 
even  year,  such  information  relating  to  their  past  expenditures  and 
income,  present  financial  conditions,  and  to  their  financial  needs  for  the 
ensuing  biennial  fiscal  period,  together  with  anticipated  income,  as  said 
commission  shall  determine  is  necessary  and  essential  to  the  preparation 
of  a  complete  budget  for  presentation  to  the  legislature.  It  shall  be  the 
duty  of  the  several  state  institutions,  departments,  boards,  commissions 
and  offices  to  promptly  comply  with  any  and  all  requests  for  information 
which  said  budget  commission  may  make,  and  to  render  all  possible 
assistance  to  the  commission  in  carrying  out  the  requirements  of  this 
act. 

Section  5.  It  shall  be  the  duty  of  said  budget  commission  to  assemble, 
on  or  before  the  first  day  of  December,  nineteen  hundred  twenty,  and 
every  two  years  thereafter,  the  information  gathered,  including  an  esti- 
mate of  the  financial  needs  of  the  several  state  departments,  institutions, 
boards,  commissions  and  offices  for  the  biennial  fiscal  period  beginning 
on  the  first  day  of  July  thereafter.  Said  commission  shall  then  proceed 
to  examine  and  revise  the  estimated  financial  needs  submitted  and  before 
final  revision  shall  hold  public  hearings  in  relation  thereto,  at  which 
hearings  any  executive  officer  of  the  state  government,  including  members 
of  boards  and  commissions,  shall  have  the  right  to  be  heard  on  the  esti- 
mates of  the  department,  institution,  board,  commission  or  office  he  rep- 
resents. It  shall  be  the  duty  of  all  such  officers  of  the  state  government, 
or  their  subordinates,  to  attend  such  hearings  upon  request  of  the  budget 
commission.  The  governor-elect  shall  be  invited,  and  he  is  hereby  author- 
ized, to  sit  with  said  commission  at  such  hearings,  and  he  may  examine 
the  estimates  and  other  information  in  possession  of  said  commission  and 
may  make  such  suggestions  and  recommendations  in  relation  thereto  as 
he  may  deem  advisable.  Upon  revision  of  said  estimates  the  commis- 
sion shall  prepare  a  statement  showing  the  estimated  amounts  required 
for  the  conduct  of  the  state  government  in  all  its  departments,  institu- 
tions, boards,  commissions  and  offices  for  each  year  of  the  biennial  fiscal 
period  next  ensuing,  together  with  the  per  cent  of  increases  and  decreases 
from  expenditures  for  the  next  preceding  biennium  and  for  the  first 
year  of  the  current  biennium,  and  the  reasons  therefor;  an  estimate  of 
the  revenues  of  the  state,  and  the  sources  thereof,  for  each  year  of  the 
ensuing  biennial  fiscal  period ;  the  expenditures,  including  bills  due  ana 
unpaid,  and  revenues  during  the  first  year  of  the  current  biennial  fiscal 
period  and  also  for  each  year  of  the  next  preceding  biennial  fiscal  period ; 
an  estimate  of  the  amoiint  needed  for  emergency  purposes,  the  amount 
needed  to  pay  and  discharge  such  principal  and  interest  of  the  state  debt 
as  may  become  due,  together  with  such  other  data  relating  to  fiscal  con- 
ditions as  said  commission  shall  deem  wise  and  of  material  value  to  the 
legislature  in  its  consideration  of  the  financial  needs  of  the  state  govern- 
ment. When  so  prepared,  said  statement  shall  constitute  and  be  known 
as  the  state  budget. 

Section  6.     Within  ten  days  after  the  legislature  convenes  in  regular 


40 

session,  it  shall  be  the  duty  of  the  Governor,  as  chairman  of  the  budget 
commission,  to  transmit  to  each  branch  of  the  legislature  the  budget 
herein  provided  accompanied  by  such  explanations  and  recommendations 
relative  thereto  as  he  may  deem  necessary  and  advisable.  A  sufficient 
number  of  copies  of  the  budget  shall  be  printed  to  supply  the  press,  a 
copy  to  each  member  of  the  legislature,  a  copy  to  the  executive  officer  of 
each  state  department,  a  copy  to  each  state  institution,  board  and  com- 
mission, also  two  hundred  copies  for  distribution  by  the  budget  com- 
mission. 

Section  7.  Said  budget  commission  shall  have  the  authority  to 
examine  the  books  and  accounts,  and  investigate  the  general  affairs  of 
the  several  state  institutions,  departments,  boards,  commissions  and 
offices  at  any  time  it  may  deem  necessary  for  ascertaining  facts  essential 
to  a  proper  administration  of  this  act,  and  for  the  purpose  of  making 
recommendations  to  the  legislature  relating  to  the  degree  of  efficiency 
and  economy  in  which  they  are  being  conducted.  Upon  demand  of  the 
budget  commission,  it  shall  be  the  duty  of  any  and  all  officers  of  this 
state  to  produce,  for  examination,  the  books  and  papers  of  their  respec- 
tive offices,  departments,  and  institutions,  answer  all  questions  relating 
thereto  and  to  render  every  possible  assistance  to  the  commission  in 
meeting  the  requirements  of  this  section.  In  connection  with  such  exami- 
nations, the  budget  commission,  or  any  member  thereof,  may  compel 
attendance  and  testimony  of  witnesses,  administer  oaths,  and  examine 
such  persons  as  deemed  necessary  and  compel  the  production  of  books 
and  papers.  The  orders  and  subpoeras  issued  by  said  commission,  or 
member  thereof,  in  pursuance  of  the  authority  in  them  vested  by  pro- 
visions of  this  section,  may  be  enforced  upon  the  application  of  said 
commission  to  any  circuit  court  by  proceedings  in  contempt  therein,  as 
provided  by  law. 

Section  8.  All  departments,  institutions,  boards,  commissions  and 
offices  of  the  state  government  which  heretofore  have  been  supported  and 
maintained  in  whole,  or  in  part,  from  income  derived  from  fees,  licenses, 
penalties,  or  in  any  manner  other  than  by  specific  appropriations  by  the 
legislature,  shall  hereafter  be  subject  to  the  provisions  of  this  act  and, 
except  as  hereinafter  provided,  shall  each  be  wholly  supported  and  main- 
tained by  specific  appropriations  by  the  legislature,  following  the  sub- 
mission to  the  legislature  of  the  budget,  herein  provided,  containing  the 
recommendations  of  the  budget  commission  relative  thereto.  All  income 
of  such  departments,  institutions,  boards,  commissions  or  offices  shall  by  i 
them  be  turned  into  the  state  treasury  in  the  manner  provided  by  law, 
and  such  moneys  shall  not  be  paid  out  of  the  state  treasury  except  in  pur- 
suance of  specific  appropriations  made  by  law:  Provided,  That  the 
income  derived  by  the  State  Game,  Fish  and  Forest  Fire  Commissioner's 
department  from  licenses  and  fees  shall  be  estimated  and  such  estimates 
included  in  the  budget,  and  shall  be  specifically  appropriated  to  said 
department  for  its  use  in  the  manner  and  for  purposes  provided  by  law. 
Said  department,  in  all  its  activities,  shall  be  wholly  financed  and  main- 
tained by  such  income  and  from  no  other  source.  Unexpended  balances 
standing  to  the  credit  of  said  department  at  the  close  of  any  fiscal  period 
shall  be  subject  to  transfer  to  the  general  fund,  or  to  the  emergency  fund, 
and  shall  be  so  transferred  by  the  State  Treasurer  upon  written  order  of 
the  budget  commission :  Provided  further,  That  the  state  revenue  derived 


41 

from  the  registration  of  automobiles  and  chauffeurs  shall  be  estimated 
and  included  in  the  budget,  and  shall  be  specifically  appropriated  to  the 
State  Highway  Department  for  its  use  in  the  manner  and  for  purposes 
provided  by  law. 

Section  9.  All  departments,  institutions,  boards,  commissions  and 
offices  of  the  state  government  shall  hereafter  be  wholly  financed  and 
maintained  by  specific  appropriations  by  the  legislature,  except  that  the 
University  of  Michigan  and  the  Michigan  Agricultural  College  shall  con- 
tinue to  receive  such  income  as  each  may  derive  from  its  respective  mill 
tax  and  interest  fund,  and  except  that  the  State  Normal  College  shall 
continue  to  receive  such  income  as  it  may  derive  from  its  interest  fund. 
Except  as  herein  otherwise  provided,  no  money  shall  be  paid  out  of  the 
state  treasury  to  any  such  state  department,  institution,  board,  commis- 
sion, office,  or  officer,  except  it  be  in  pursuance  of  specific  appropriations 
made  by  law,  and  for  the  purpose  for  which  the  appropriations  were 
made :  Provided,  That  no  money  shall  be  drawn  from  the  state  treasury 
in  excess  of  the  amount  appropriated  for  each  activity  of  the  state  govern- 
ment :  Provided  further,  That  no  money  appropriated  for  a  specific  pur- 
pose shall  be  transferred  and  used  for  any  other  purpose  by  any  state 
department,  institution,  board,  commission  or  office,  without  the  written 
approval  of  the  budget  commission. 

Section  10.  Except  as  hereinafter  provided,  all  revenue  of  the  state 
government,  from  whatever  source  derived,  shall  be  turned  into  the  state 
treasury  by  the  state  department,  institution,  board,  commission  or 
officer,  which  makes  collection  or  receives  such  revenue,  on  or  before  the 
first  day  of  each  month  following  its  collection  or  receipt.  No  funds  shall 
be  disbursed  from  the  state  treasury  unless  specifically  authorized  by 
law,  and  then  only  upon  warrant  of  the  Auditor  General  and  for  the  pur- 
pose, or  purposes,  named  in  the  appropriation  or  governing  statute.  The 
Auditor  General  may  refuse  to  draw  his  warrant  upon  the  state  treasury 
for  any  funds  requested  by  any  state  department,  institution,  board, 
commission  or  office  unles^  satisfactory  showing  shall  be  made  that  the 
funds  requested  are  actually  needed  at  the  time  and  in  the  amount 
named  in  such  request:  Provided,  That  such  funds  as  shall  be  needed, 
from  time  to  time,  by  each  state  institution  shall  be  credited  to  its  appro- 
priation account  in  the  state  treasury  upon  warrant  of  the  Audior  Gen- 
eral, and  the  amount  so  credited  shall  only  be  paid  out  of  the  state 
treasury  upon  check-vouchers  signed  by  the  executive  officer  of  the  insti- 
tution, the  form  of  which  check-voucher  shall  be  prescribed  by  the  Auditor 
General.  All  such  funds  shall  be  used  by  said  institutions  strictly  for 
the  purpose,  or  purposes,  named  in  the  appropriation  act,  or  acts,  and  in 
accordance  with  the  requirements  of  the  general  accounting  laws  of  the 
state:  Provided  further,  That  each  state  institution  shall  be  permitted 
to  establish  and  maintain  a  petty  cash  account  in  an  amount  which  the 
Auditor  General  shall  deem  is  necessary  and  expedient,  but  in  no  case 
shall  such  account  exceed,  at  any  time,  the  sum  of  five  hundred  dollars 
(1500.00)  :  Provided,  That  the  provisions  of  this  section  shall  not  apply 
to  or  affect  such  revenue  as  may  be  derived  by  the  University  of  Michigan, 
the  Michigan  Agricultural  College,  and  the  State  Normal  College,  from 
sources  other  than  specific  appropriations :  Provided  further,  That  the 
State  Treasurer  shall  keep  separate  accounts  of  the  funds  used  by  the 


42 

state  institutions  engaged  in  manufacturing  on  state  account,  and  such 
funds  shall  be  paid  out  of  the  state  treasury  in  accordance  with  the 
requirements  of  this  section. 

Section  11.  All  emergency  claims  against  the  state  shall  be  presented 
to  the  Board  of  State  Auditors  for  investigation  and  consideration,  and 
all  such  claims  allowed  by  said  board,  together  with  reasons  for  their 
allowance,  shall  be  certified  in  writing  by  said  board  to  the  Auditor 
General  before  he  draws  his  warrant  therefor. 

Section  12.  The  Governor  shall  have  the  power,  and  he  is  hereby 
directed  upon  a  finding  of  guilt,  to  remove  from  office  the  executive  officer 
of  any  state  department,  the  members  of  any  state  board  or  commission, 
or  the  incumbent  of  any  other  office  of  the  state  government,  who  refuses 
or  wilfully  neglects  to  comply  with  any  of  the  requirements  of  this  act. 
It  shall  be  the  duty  of  the  budget  director  to  report  to  the  Governor  each 
such  refusal  or  neglect  and  thereupon  the  Governor,  before  taking  final 
action  thereon,  shall  summons  the  person,  or  persons,  complained  against 
to  make  answer  why  he,  or  they,  should  not  be  removed  from  office. 

Section  1.3.  The  Board  of  State  Auditors  are  hereby  directed  to  fur- 
nish suitable  offices  for  the  use  of  said  State  Budget  Commission,  which 
offices,  if  possible,  shall  be  located  at  the  state  capitol  building. 

Section  14.  For  the  purpose  of  meeting  the  expense  of  carrying  out 
the  provisions  of  this  act,  there  is  hereby  appropriated  frr  the  use  of  said 
State  Budget  Commission  the  sum  of  eighteen  thousand  dollars,  eight 
hundred  dollars  of  which  amount  the  Auditor  General  shall  incorporate 
in  the  state  tax  for  the  fiscal  year  ending  June  30th,  1920,  and  ten  thou- 
sand dollars  of  which  shall  be  incorporated  in  the  state  tax  for  the  fiscal 
year  ending  June  30th,  1921. 

Section  1.5.  Sections  three  and  seven  of  chapter  sixty-three,  and  sec- 
tions six  and  seven  of  chapter  sixty-four,  compiled  laws  of  nineteen  hun- 
dred fifteen,  insofar  as  said  sections  relate  to  the  powers  and  duties  of 
the  State  Board  of  Corrections  and  Charities  and  the  making  of  reports 
thereto  by  state  institutions ;  and  all  other  acts,  or  parts  of  acts,  contra- 
vening the  provisions  of  this  act,  including  the  provisions  of  all  acts 
making  specified  periodical  (continuing)  appropriations,  except  act  three 
hundred  three,  public  acts  of  nineteen  hundred  seven,  and  act  one  hun- 
dred fourteen,  public  acts  of  nineteen  hundred  fifteen  (Act  303,  P.  A. 
1907,  and  Act  114,  P.  A.  1915)  relating  to  the  mill  tax  for  the  support  of 
the  University  of  Michigan  and  the  Michigan  Agricultural  College,  are 
hereby  repealed. 


43 

PROPOSED  LAW  PROVIDING  FOR  A  UNIFORM  ACCOUNTING 

SYSTEM 

A    BILL 

To  provide  for  the  formulation  and  establishment  of  a  uniform  system 
of  accounting  and  reporting  in  the  several  departments,  offices  andJjisti- 
tutions  of  the  state  government,  and  in  all  county  offices ;  to  provide  for 
the  examination  of  the  books  and  accounts  of  each  state  department, 
office  and  institution,  and  of  each  county  office;  to  provide  for  annual 
financial  reports  from  all  such  departments,  institutions  and  offices,  and 
for  the  tabulation  and  publication  of  comparative  financial  statistics 
relating  thereto;  to  provide  that  the  Auditor  General  shall  administer 
the  provisions  of  this  act,  prescribing  his  powers  and  duties  in  relation 
thereto ;  to  provide  penalties  for  violation,  or  failure  to  comply  with  the 
requirements  of  this  act ;  to  provide  for  meeting  the  expense  authorized 
by  this  act,  and  to  repeal  act  number  one  hundred  eighty-three,  public 
acts  of  nineteen  hundred  .eleven  and  all  other  acts,  or  parts  of  acts,  con- 
travening the  provisions  of  this  act. 

The  People  of  the  State  of  Michigan  enact: 

Section  1.  It  shall  be  the  duty  of  the  Auditor  General  to  formulate, 
prescribe  and  install  a  system  of  accounting  and  reporting  in  conformity 
with  the  provisions  of  this  act  that  shall  be  uniform  for  every  state 
department,  office  and  institution,  and  for  every  county  office  and  public 
account  of  the  same  class.  The  Auditor  General  is  hereby  required  and 
directed  to  proceed  to  carry  out  the  requirements  of  this  section  imme- 
diately following  the  date  this  act  takes  effect. 

Section  2.  Said  system  shall  embrace  accounts  showing  all  sources  of 
income,  the  amounts  due,  collected  and  received  from  each  source,  the 
amount  expended  for  each  purpose,  bills  and  accounts  payable;  the 
receipt,  use  and.  disposition  of  other  public  property  and  the  income,  if 
any,  derived  therefrom.  Said  system  shall  also  embrace  accounts  which 
shall  show  for  each  industry  conducted  by  any  institution  or  department 
of  the  state  government  the  unit  cost  of  operation  and  shall  be  in  such 
form  as  shall  exhibit  actual  detailed  financial  results  of  each  industrial 
activity.  Said  system  shall  embrace  such  other  forms  of  accounts  as  the 
Auditor  General  may  deem  wise  and  essential  to  efficient  financial  admin- 
istration of  public  affairs  pertaining  to  the  state  and  county  governments. 

Section  3.  A  separate  account  shall  be  kept  of  each  appropriation,  or 
fund,  made  to  or  received  by  each  department,  institution  and  office  of 
the  state  government,  and  by  each  county  office,  which  shall  show  the 
date  and  manner  of  each  payment  therefrom,  the  name  and  address  of 
the  person  or  association  of  persons  to  whom  paid,  and  for  what  purpose 
paid. 

Section  4.  It  shall  be  the  duty  of  each  department,  institution  and 
office  of  the  state  government,  and  each  county  office,  to  make  an  annual 
financial  report  in  accordance  with  forms  prescribed  by  the  Auditor 
General  which  shall  be  uniform  for  all  accounts  of  the  same  class.  Said 
reports  shall  be  made  in  duplicate,  one  copy  of  which  shall,  within  thirty 
days  after  the  close  of  each  fiscal  year,  be  filed  in  the  office  of  the  Auditor 
General  and  one  copy  with  the  Governor,  and  shall  contain  an  accurate 


44 

statement  in  summarized  form  showing,  for  each  fiscal  year  ending  June 
30,  the  amount  of  all  collections  and  receipts  from  all  sources,  and  their 
disposition,  all  accounts  due  the  public  treasury  but  not  collected,  the 
amount  of  expenditures  for  every  purpose  and  by  what  authority  author- 
ized, the  amount  of  indebtedness,  the  cost  of  operation  of  all  industrial 
activities  and  financial  results  obtained  therefrom,  balance  of  funds  on 
hand  at  the  close  of  each  fiscal  period,  together  with  such  other  informa- 
tion as  may  be  required  by  the  Auditor  General.  The  substance  of  these 
reports  shall  be  arranged  by  the  Auditor  General  and  published  at  the 
expense  of  the  state  in  an  annual  volume  of  comparative  statistics,  and 
shall  be  in  such  form  as  shall  show  the  comparative  receipts  from  the 
various  sources  of  revenue  and  the  comparative  costs  of  the  several 
branches  of  the  state  and  county  governments.  A  sufficient  number  of 
copies  of  said  volume  shall  be  published  to  furnish  a  copy  to  each  member 
of  the  legislature,  a  copy  to  each  state  department,  institution  and  office, 
a  copy  to  each  county  office,  and  two  hundred  copies  for  general  <lis 
tribution. 

Section  5.  The  Auditor  General  shall  hereafter  be  the  supervisor  of 
the  accounts  of  all  state  departments,  institutions  and  offices,  and  of  all 
county  offices.  He  shall  have  the  power,  and  he  is  hereby  directed,  to 
examine,  or  cause  to  be  examined,  the  books,  accounts  and  financial 
affairs  of  each  department,  institution  and  office  of  the  state  department, 
and  of  each  county  office.  Such  examination  shall  be  niiide  at  least  once 
in  each  year,  or  as  often  as  in  the  judgment  of  the  Auditor  General  it 
shall  be  for  the  public  good.  The  Auditor  General  is  hereby  authorized 
to  employ  such  assistant  accountants  and  examiners  as  lie  may  deem 
necessary  to  properly  and  efficiently  administer  the  provisions  of  this  act 
and  to  fix  their  compensation,  which  compensation  shall  not  exceed  an 
average  of  two  thousand  dollars  per  annum  for  each  of  said  accountants 
and  examiners  employed.  In  addition  to  such  compensation,  they  shall 
be  paid  their  necessary  traveling  expenses,  which  compensation  and 
expenses,  when  audited  and  approved  by  the  Auditor  General,  shall  be 
paid  by  the  State  Treasurer  out  of  the  fund  appropriated  for  that  pur- 
pose, upon  warrant  of  the  proper  officer.  The  Auditor  General  and  the 
Deputy  Auditor  General  shall  receive  their  actual  traveling  expenses 
incurred  while  engaged  in  administering  the  provisions  of  this  act,  which 
shall  be  paid  by  the  State  Treasurer  out  of  the  funds  appropriated  for 
that  purpose,  upon  warrant  of  the  Auditor  General. 

Section  6.  Upon  demand  of  the  Auditor  General,  Deputy  Auditor 
General,  or  any  person  duly  appointed  by  the  Auditor  General,  to  make 
the  examinations  herein  provided,  it  shall  be  the  duty  of  any  and  all 
officers  of  the  state  and  county  governments  to  produce,  for  examination, 
the  books  of  account  and  papers  of  their  respective  departments,  institu- 
tions and  offices,  and  to  truthfully  answer  all  questions  relating  thereto. 
In  connection  with  such  examinations,  the  Auditor  General,  Deputy 
Auditor  General,  or  any  person  designated  to  make  such  examinations, 
may  issue  subpoenas,  direct  the  service  thereof  by  any  police  officer,  and 
compel  the  attendance  and  testimony  of  witnesses,  may  administer  oaths 
and  examine  such  persons  as  may  be  necessary,  and  may  compel  the  pro- 
duction of  books  and  papers.  The  orders  and  subpoenas  issued  by  the 
Auditor  General,  Deputy  Auditor  General,  or  by  any  person  charged 
with  the  duty  of  making  the  examinations  herein  provided,  in  pursuance 


45 

of  the  authority  in  them  vested  by  provisions  of  this  section,  may  be 
enforced  upon  their  application  to  any  circuit  court  by  proceedings  in 
contempt  therein,  as  provided  by  law. 

Section  7.  A  report  shall  be  made,  in  duplicate,  of  each  examination 
made  in  accordance  with  the  provisions  of  this  act.  Said  duplicate  report 
shall  be  signed  and  verified  by  the  officer  making  the  examination,  one 
copy  of  which  shall  be  filed  in  the  office  of  the  Auditor  General  and_one 
copy  with  the  executive  officer  of  the  department,  institution  or  office 
examined.  If  any  such  examination  discloses  malfeasance,  misfeasance, 
nonfeasance  or  gross  neglect  of  duty  on  the  part  of  any  officer  or  employe 
of  any  department,  institution,  or  office  of  the  state  government,  or  on 
the  part  of  any  officer  or  employe  of  any  county  office,  for  which  a  crim- 
inal penalty  is  provided  by  law,  an  additional  copy  of  such  report  shall  be 
made  and  filed  with  the  Attorney  General,  whose  duty  it  shall  be,  within 
sixty  days  after  receipt  of  such  report,  to  institute  criminal  proceedings 
against  such  officer  or  employe,  or  direct  that  such  criminal  proceedings 
be  instituted  by  the  prosecuting  attorney  of  the  county  in  which  the 
offense  was  committed.  It  shall  also  be  the  duty  of  the  Attorney  General, 
or  the  prosecuting  attorney,  as  the  case  may  be,  to  institute  civil  action 
in  any  court  of  competent  jurisdiction  for  the  recovery  of  any  public 
moneys,  disclosed  by  any  such  examinations  to  have  been  illegally 
expended,  or  collected  and  not  accounted  for;  also  for  the  recovery  of  any 
public  property  disclosed  to  have  been  converted  and  misappropriated. 
Kefusal  or  neglect  to  comply  with  the  requirements  of  this  section  on  the 
part  of  the  Attorney  General,  or  on  the  part  of  the  prosecuting  attorney 
of  any  county  in  the  state,  shall  be  sufficient  cause  for  his  removal  from 
office  by  the  Governor. 

Section  8.  It  is  hereby  made  the  duty  of  the  executive  officers  of  each 
state  department,  institution  and  office,  and  the  executive  officer  of  each 
county  office,  to  adopt  and  use  the  books,  forms,  records  and  systems  of 
accounting  and  reporting,  prescribed  by  the  Auditor  General  and  to 
promptly  purchase  such  books,  forms  and  records  as  may  be  necessary 
thereto,  in  the  manner  now  provided  by  law  for  the  purchase  of  such 
articles.  Kefusal  or  neglect  on  the  part  of  any  officer  of  any  branch  of 
the  state  government,  or  any  county  officer,  to  provide  such  books,  forms 
or  records,  or  to  use  them,  or  to  make  the  reports  required  by  this  act,  or 
keep  the  accounts  of  his  office  as  directed  by  the  Auditor  General,  shall 
be  sufficient  cause  for  his  removal  from  office  by  the  Governor. 

Section  9.  The  Governor  shall  have  the  power,  and  he  is  hereby 
directed  upon  a  finding  of  guilt,  to  remove  from  office  the  officer  of  any 
branch  of  state  government,  or  county  government,  who  refuses  or  will- 
fully neglects  to  keep  the  accounts  of  his  office  in  the  manner  and  form 
prescribed  by  the  Auditor  General,  or  to  make  the  reports  herein  pro- 
vided, or  who  refuses  or  neglects  to  comply  with  any  other  requirements 
of  this  act.  It  shall  be  the  duty  of  the  Auditor  General  to  promptly  report 
to  the  Governor,  each  such  refusal  or  neglect  and  thereupon  the  Governor, 
before  taking  final  action  thereon,  shall  summons  the  officer  complained 
against  to  make  answer  why  he  should  not  be  removed  from  office. 

Section  10.  Any  person  who  shall  give  or  offer  to. any  examiner, 
accountant,  clerk  or  other  employe  of  the  Auditor  General's  depart- 
ment, any  money,  gift,  emolument,  or  thing  of  value  for  the  purpose  of 
influencing  the  action  of  such  examiner,  or  other  person,  in  any  matter 


46 

relating  to  the  examination  of  any  public  account  authorized  by  this  act, 
or  for  the  purpose  of  preventing  or  delaying  the  examination  of  any  such 
public  account,  or  for  the  purpose  of  influencing  the  action  of  such 
examiner,  or  other  person,  in  framing,  changing,  withholding  or  delaying 
any  report  of  any  examination  of  any  such  public  account  shall  be 
deemed  guilty  of  a  misdemeanor  and,  upon  conviction  thereof,  shall  be 
punished  by  a  fine  of  not  more  than  one  thousand  dollars  nor  less  than 
two  hundred  dollars,  or  he  may  be  imprisoned  in  the  Detroit  House  of 
Correction  for  a  period  of  not  more  than  six  months  and  not  less  than 
thirty  days,  or  he  may  be  punished  by  both  such  fine  and  imprisonment,  in 
the  discretion  of  the  court. 

Section  11.  Any  person  appointed  by  the  Auditor  General  to  make 
the  examinations  herein  provided,  or  any  officer,  clerk  or  other  employe  of 
the  Auditor  General's  department,  who  shall  receive,  solicit  any  money, 
gift,  emolument,  or  anything  of  value  for  the  purpose  of  being  influenced 
in  the  matter  of  the  examination  of  any  public  account  authorized  by  this 
act,  or  for  the  purpose  of  being  influenced  to  prevent  or  delay  the  exam- 
ination of  any  such  public  account,  shall  be  deemed  guilty  of  ;i  misde- 
meanor and,  upon  conviction  thereof,  shall  be  punished  by  a  fine  of  not 
more  than  one  thousand  dollars  and  not  less  than  two  hundred  dollars,  or 
he  may  be  imprisoned  in  the  Detroit  House  of  Correction  for  a  period  of 
not  more  than  six  months  and  not  less  than  thirty  days,  or  he  may  be 
punished  by  both  such  fine  and  imprisonment,  in  the  discretion  of  the 
court. 

Section  12.  The  Auditor  General  shall  estimate,  as  near  as  may  be, 
the  amount  of  money  necessary  to  meet  the  expense  of  administering  the 
provisions  of  this  act  during  each  year  of  the  biennial  period,  commencing 
the  first  day  of  July,  nineteen  hundred  nineteen,  and  he  shall  make  a 
similar  estimate  every  two  years  thereafter:  Provided,  That  if  the  legis- 
lature shall  provide  for  a  budget  system  of  making  and  controlling  appro- 
priations, then,  and  in  that  case,  the  duty  imposed  upon  the  Auditor 
General  by  this  section  shall  thereafter  be  discharged  by  a  budget  com- 
mission or  budget  commissioner,  as  the  case  may  be,  and  the  expense  of 
administering  the  provisions  of  this  act  shall  be  met  by  a  specific  appro- 
priation, included  in  the  budget.  There  is  hereby  appropriated  from  the 
general  fund  of  the  state  a  sufficient  amount  to  meet  the  expenditures 
necessary  to  carry  out  the  requirements  of  this  act,  and  the  Auditor 
General  is  hereby  directed  to  incorporate  in  the  state  tax  a  sufficient 
amount  to  reimburse  the  general  fund  for  the  money  drawn  from  it  for 
the  purposes  herein  provided. 

Section  12.  Act  number  one  hundred  eighty-three  of  the  public  acts 
of  nineteen  hundred  eleven,  and  all  other  acts  or  parts  of  acts  contra- 
vening the  provisions  of  this  act,  are  hereby  repealed. 


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COMPARATIVE  STATEMENT. 

Showing  salaries  paid  deputies  and  secretaries  of  the  various  state  departments  for 
the  years  1908  and  1918. 


1908. 

1918. 

Deputy  Secretary  of  State  .... 

$2  500  00 

$2  500  00 

Deputy  Auditor  General 

2  500  00 

2  500  00 

Deputy  State  Treasurer  

2  000  00 

2  500  00 

Deputy  Attorney  General 

2  000  00 

4  000  00 

Deputy  Superintendent  of  Public  Instruction  

2  000  00 

2  500  00 

Deputy  Highway  Commissioner 

2  000  00 

Clerk,  Board  of  State  Auditors  

2  000  00 

2  800  00 

Secretary   Michigan  Securities  Commission 

a 

4  000  00 

Secretary,  Public  Domain  Commission  

2  000  OOb 

3  500  00 

Deputy  Insurance  Commissioner 

2  000  00 

3  000  00 

Deputy  Labor  Commissioner  

1   500  00 

2  000  00 

Deputy  Banking  Commissioner 

2  000  00 

2  500  00 

Deputy  Food  and  Drug  Commissioner  

1  ,  500  OOc 

2  500  00 

Chief  Deputy,  Game  Fish  and  Forest  Fire  Commissioner  
Secretary  to  the  Governor  

1,500  OOd  , 
1  ,  800  00 

2,000  00 
2  500  00 

Secretary   Board  of  Health 

2  500  00 

2  500  00 

Secretary,  Board  of  State  Tax  Commissioners   

2  000  00 

3  000  00 

Secretary   Michigan  Railroad  Commission 

1   500  00 

2  000  00 

Secretary,  Industrial  Accident  Board  

e 

2  500  00 

Secretary,  State  Board  of  Corrections  and  Charities  .  .  . 

2.000  00 

3.000  00 

aEstablished  1913. 

b  Deputy  Land  Commissioner  in  1908. 

cDeputy  Dairy  and  Food  Commissioner  in  1908. 

dDeputy  Game  Warden  in  1908. 

eEstablished,  Extra  Session  of  r912. 


COMPARATIVE   STATEMENT. 

Showing  costs  for  1908  and  1917  of  the  principal  departments  of  the  state  government,  together 
with  the  per  cent  of  increase  or  decrease. 


1908. 

1917. 

Increase 
Per  Cent. 

Decrease 
Per  Cent. 

Attorney  General  

$19,117  00 

$28  831   00 

51 

Auditor  General     

172  081  00 

151    186  00 

12 

Banking  Commissioner  

35,368  00 

83,459  00 

136 

Dairy  and  Food  Com'sioner.  . 

41,917  00 

55,709  00 

33 

Department  of  Labor 

37  920  00 

58  969  00 

56 

Executive  Office  

14,483  00 

15,743  00 

9 

Game,  Fish  and  Forest  Fire 
Commissioner  

45  813  00 

219  075  00 

378 

Geological  Survey  

13,278  00 

36,659  00 

176 

Industrial  Accident  Board  .  .  . 

a 

50,317  00 

Insurance  Commissioner  

15,265  '00 

56,753  00 

272 

Michigan  Railroad  Commis- 
sion   

23  881  00 

33  387  00 

40 

Public  Domain  Commission  .  . 

b  50,642  00 

89,924  00 

78 

Secretary  of  State  

85  806  00 

184  294  00 

115 

State  Tax  Commission 

42   122  00 

200  867  00 

376 

State  Board  of  Fish  Commis- 
sioners   

45  088  00 

74  236  00 

65 

State  Board  of  Health  

25,067  00 

100  844  00 

303 

State  Highway  Department.. 

78,177  00 

1,627,658  00 

1982 

State  Library  

34,717  00 

45,306  00 

31 

State  Military  Purposes  

126,501  00 

188  924  00 

49 

State  Naval  Brigade.    .    . 

16  867  00 

38  502  00 

128 

State  Treasurer  

11,323  00 

22  361  00 

97 

Supt.  of  Public  Instruction.  .  . 

21,667  00 

43   122  00 

99 

Supreme  and  Circuit  Courts  .  . 

199,898  00 

310,256  00 

55 

a  Organized  in  1913. 

b  Includes  $42,057,  expense  of  state  land  office  which  office  was  consolidated  with  the  office 
of  the  Public  Domain  Commission  in  1915. 


52 


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-1917. 

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GO  i-l  00  >O 

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new  bu. 

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005  CO 
(Mi-HiH 

gineering 

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.    .    . 

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a 

University  of  Michigan  
Michigan  Agricultural  College  .... 
State  Normal  College  
Western  State  Normal  School.  . 

**,&*.  •:. 

Northern  State  Normal  School.  .  . 
Central  Michigan  Normal  School. 
Michigan  College  of  Mines  

*Includes  expenditure  for  G 
aDecrease. 

AMOUNTS  PAID  FOR  SERVICES  OF  ARCHITECTS  FOR  THE  FIVE  YEAR  PERIOD 

ENDING  JUNE  30TH,    1917.     ALSO  AMOUNT    PAID   FOR   SERVICES   OF 

ARCHITECTS  FOR  THE  FISCAL  YEAR,  ENDING  JUNE  30TH,   1917. 


Five  year 
period. 

1917. 

University  of  Michigan 

$60  727  37 

$19  224  63 

Michigan  Agricultural  College  

10  591   97 

2  843  70 

State  Normal  College 

17   138  31 

6  017  96 

Central  Michigan  Normal  School  

4,427  4S 

Western  State  Normal  School 

4  215  00 

15  00 

Northern  State  Normal  School  

7  524  31 

Michigan  College  of  Mines  (no  expense) 

Michigan  School  for  the  Deaf  

9  013  62 

Michigan  School  for  the  Blind  

7   101   06 

1   292  02 

Michigan  Employment  Institution  for  the  Blind  

339  33 

State  Public  School  

1   998  86 

1   035  41 

Industrial  School  for  Boys  (no  expense)  

Industrial  Home  for  Girls  (no  expense)   .    . 

Michigan  Soldiers'  Home 

1   077  62 

77  62 

Kalamazoo  State  Hospital  

7  026  69 

3  465  70 

Pontiac  State  Hospital  (no  expense) 

Traverse  City  State  Hospital  

1   416  00 

1  ('•('•)    00 

Newberry  State  Hospital   

6  735   70 

50   65 

Michigan  Home  and  Training  School  

3  811   24 

345  00 

Michigan  Farm  Colony  for  Epileptics  

11    249  43 

2  737   76 

Ionia  State  Hospital 

1   925   10 

Michigan  State  Prison  (no  expense)  .    .  . 

State  House  of  Correction  and  Branch  Prison  

225   60 

Michigan  Reformatory  

2   777  00 

Michigan  State  Sanatorium.  .    . 

1    421   53 

Total  

$160  743  22 

$37  271   45 

55 


LIST  OF  BOOKS,  REPORTS,  BULLETINS,  ETC.,  PRINTED  BY  AND  UNDER 

DIRECTION     OF      THE     VARIOUS      DEPARTMENTS 

OF  THE    STATE    GOVERNMENT. 


DEPARTMENT. 

KIND. 

Year. 

No. 
Copies. 

No. 
Pages. 

Cost. 

16th  Annual  Report 

1914 

1,200 

208 

$    506  50 

17th  Annual  Report  

1915 

1,200 

224 

536  11 

18th  Annual  Report  

1916 

1,200 

120 

359  07 

Attorney  General       

Annual  Report  

1915 

968 

664 

1,009  87 

Auditor  General                       

Annual  Report  
Annual  Report  

1916 
1915 

970 
750 

648 
408 

976  39 
1,638  61 

Board  of  Agriculture  

Annual  Report  
Annual  Report  

1916 
1915 

750 
9,400 

452 
364 

2,038  14 
2,867  38 

Board  of  Corrections  and  Charities  .  . 

Annual  Report  
Biennial  Report  

1916 
1915=16 

9,400 
1,200 

896 
340 

5,319  00 
733  40 

Biennial  Report 

1915=16 

500 

160 

569  43 

Board  of  Equalization  
Board  of  Examiners  of  Barbers  
Board  of  Geological  Survey  

Annual  Report  
Biennial  Report  
Bulletin  20  

1916 
1913=14 
1915 

700 
700 
1,500 

224 
8 
180 

629  55 
12  05 
705  68 

Board  of  Health  
Board  of  Library  Commissioners 

Bulletin  21  

Annual  Report  
Annual  Report 

1915 

1914 
1915 

1,400 

3,000 
1,000 

404 

160 
96 

2,824  35 

828  26 
224  75 

Board  of  State  Auditors  

Annual  Report  
Annual  Report  
Price  List,  Stationery  

1915 
1916 
1915=17 

500 
700 
300 

344 
348 
20 

924  39 
1,017  05 
63  06 

Commissioner  of  Banking  

Price  List,  Printing  and  Binding  

Annual  Report  
Annual  Report 

1916=18 

1915 
1916 

250 

,050 
,150 

48 

772 
636 

133  40 

3,226  60 
3  510  79 

Commissioner  of  Insurance  

Fire  Report  

1916 

800 

24 

98  07 

Fire  and  Marine  Report 

1916 

,000 

756 

2  520  48 

Preliminary  Fire  Report  -  
Life  and  Fraternal 

1915 
1915 

,000 
,000 

24 
840 

98  82 
2  910  98 

Fire  Marshal 

1915 

3  000 

80 

254  83 

Commissioner  of  Labor  

Preliminary  Life  
Annual  Report  

1916 
1915 

800 
5,000 

72 
704 

290  49 
3,848  70 

Annual  Report.  .   . 

1916 

5,000 

744 

4  189  31 

Dairy  and  Food  Commissioner  

Annual  Report  
Annual  Report.  .  . 

1915 
1916 

1,200 
1,200 

408 
312 

946  48 
680  38 

Bulletins 

1915 

3  100 

937  08 

Bulletins  

1916 

5,000 

477  82 

Employment  Institution  for  the  Blind 
Farm  Colony  for  Epileptics  
Game,  Fish  and  Forestry  Warden.  .  . 

Biennial  Report  
Biennial  Report  
Biennial  Report  

1915=16 
1915=16 
1915=16 

700 
700 
2,000 

44 
24 
104 

101  83 
96  57 
463  14 

Highway  Commissioner 

Fire  Report  
Biennial  Report 

1916 
1915=16 

1,500 
5,000 

28 
140 

100  50 
1  559  73 

Historical  Commission  

Annual  Report  
University  Series  No.  1  

1916 
1917 

1,500 
2,500 

36 
632 

63  65 
1,713  83 

Horticultural  Society  

Annual  Report  

1915 

5,000 

216 

1,678  37 

Annual  Report 

1916 

4,000 

52 

512  25 

House  of  Correction  and  Branch 
Prison  U.  P  

Biennial  Report.  .  . 

1915=16 

700 

70 

285  49 

Industrial  Home  for  Girls  

Biennial  Report  

1915=16 

700 

32 

110  34 

Ionia  State  Hospital  -.  

Biennial  Report 

1915-16 

600 

36 

112  41 

Joint  Board  of  Trustees  of  State 
Hospitals  

Meeting  January  21  .                  .   . 

1915 

500 

16 

18  35 

Meeting  July  15 

1915 

400 

40 

49  68 

Meeting  January  20  

1916 

400 

32 

35  36 

Meeting  July  20 

1916 

500 

56 

64  94 

Kalamazoo  State  Hospital  

Meeting  January  
Biennial  Report 

1917 
1915=16 

325 
1  000 

40 
156 

44  22 
499  04 

Legislature  .  . 

House  Bills 

1917 

3  206  18 

House  Daily  Journals 

1917 

5,858  90 

House  Enrolled  Acts  

1917 

1,882  56 

History  of  House  Bills.  .    . 

1917 

484  31 

Election  Laws 

1915 

83  23 

Senate  Bin's  

3,639  64 

Senate  Daily  Journal 

5,068  82 

Senate  Enrolled  Acts 

2  028  45 

Senate  Official  Journal  .  .  . 

2.697  73 

56 


LIST  OF  BOOKS,  REPORTS,  BULLETINS,  ETC.,  PRINTED  BY  AND  UNDER 

DIRECTION      OP      THE      VARIOUS      DEPARTMENTS 

OF   THE   STATE   GOVERNMENT. 


DEPARTMENT. 

KIND. 

Year. 

No. 
Copies. 

No. 
Pages. 

Cost. 

History  ot  Senate  Bills 

276  61 

Library  ...  . 

Legislative  Hand  Book  
Biennial  Report  

1917—18 
1915—16 

6,000 
1,000 

224 
44 

1,069  24 
63  78 

Live  Stock  Sanitary  Commission.  .  .  . 

Board  of  Mediation  and  Conciliation  . 
Michigan  Home  and  Training  School  . 
Michigan  Railroad  Commission  
Michigan  Reformatory  
Newberry  State  Hospital  

Oil  Inspector  
Pontiac  State  Hospital 

American  Flag  
Biennial  Report  

Annual  Report  
Biennial  Report  
Annual  Report  
Biennial  Report  
Biennial  Report  

Annual  Report  
Annual  Report  
Biennial  Report 

1915 
1915—16 

1916 
1915—16 
1915 
1915—16 
1915—16 

1915 
1916 
1915—16 

10,000 
2,200 

2,500 
700 
900 
800 
1,000 

450 
400 
1,200 

48 
32 

32 
44 
308 
64 

84 

28 
16 
96 

708  11 
110  33 

59  99 
145  12 
1,177  69 
202  27 
243  17 

71  79 
25  12 

278  26 

1915  —  16 

800 

76 

229  18 

Public  Domain  Commission  
Board  of  Commissioners  for  the  pro- 
motion of  Uniformity  of  Legisla- 
tion 

Biennial  Report  
Biennial  Report 

1915—16 
1915—16 

6,000 
700 

180 
16 

746  73 
20  28 

School  for  the  Blind  
Traverse  City  State  Hospital  
Tax  Commission  

State  Prison 

Biennial  Report  
Biennial  Report  
Biennial  Report  

Biennial  Report 

1915—16 
1915—16 
1915—16 

1915—16 

700 
700 
4,500 

700 

56 
96 
92 

140 

118  49 
276  48 
530  13 

275  85 

State  Public  School  
State  Association  of  the  Superinten- 
dents of  Poor  
State  Treasurer  

State  of  Michigan  

Biennial  Report  

Annual  Report  
Annual  Report  
Annual  Report  
Public  Acts  

1915—16 

1916 
1916 
1917 
1917 

700 

600 
800 
800 
16,000 

92 

112 
52 
52 
1,076 

292  94 

130  22 
203  37 
219  12 
10,926  79 

Secretary  of  State 

Laws  —  Conduct  of  Elections 

1916 

10,000 

36 

201  74 

Building  and  Loan  Law  
Vital  Statistics  and  Monthly  Bulletins 

Vital  Statistics,  Supplemental  Bul- 
letin   
Revision  of  Drain  Law  
Registration  of  Birth  Laws  
Revision  of  Primary  Election  Law.  .  . 
Live  Stock  Sanitary  Law  

State  Judicature  Act  
Immediate  Effect  Acts  
Immediate  Effect  Acts  
Public  Acts 

1916 
1916 

1916 
1915 
1916 
1915 
1915    ' 

1915 
1915 
1917 
1915 

500 
7,000 
to 
9,000 

10,000 
2,000 
5,000 
10,000 
1,000 

6,000 
500 
1,000 
14  000 

100 
16 
to 
20 

20 
160 
12 
52 
32 

149 
144 
212 
1  332 

441  67 
1,076  57 

105  53 

428  79 
36  83 
285  23 
59  85 

2,614  58 
248  53 
287  28 
12  551  66 

Motor  Vehicle  Licenses  

Licensed  Chauffeurs  
Motor  Cycle  Licenses  
Laws,  Births,  Deaths  and  Marriages  . 
Crop  Reports  
Juvenile  Laws 

1916 

1916 
1916 
1916 
1916 
1916 

750 

500 
500 
1,000 
3,200 
500 

2,688 

220 
188 
60 
148 
68 

7,319  44 

419  21 
342  69 
158  18 
496  51 

77  88 

Revision  Laws  Support  of  Poor  
Laws  Relative  to  Old  Soldiers  
Laws,  Insane  and  Feeble-Minded  . 
43rd  Annual  Abstract  Relative  to 
Insane,  Deaf  and  Dumb  

Abstract  Superintendents  of  the  Poor  . 
48th  Annual  Report  Births,  Marri- 
ages and  Deaths  
Primary  Election  Laws  

1916 
1916 
1916 

1915 
1916 

1914 
1916 

1,000 
1,000 
1,000 

425 
425 

500 
7,000 

148 
36 
232 

28 
16 

232 
52 

336  83 
73  79 
385  02 

107  50 
56  00 

963  23 

221  84 

General  Election  Laws  
Insurance  Laws 

1916 
1917 

7,000 
5  000 

328 
208 

1,374  74 

847  05 

Game  and  Fish  Laws  
Laws  Governing  Manufacturing  and 
Mercantile  Corporations 

1917 
1917 

50,000 
2  500 

16 
44 

424  05 
151  63 

57 

LIST  OF  BOOKS,  REPORTS,  BULLETINS,  ETC.,  PRINTED  BY  AND  UNDER 

DIRECTION    OF    THE    VARIOUS    DEPARTMENTS 

OF   THE    STATE    GOVERNMENT. 


DEPARTMENT. 

KIND. 

Year. 

No. 
Copies. 

No. 
Pages. 

Cost. 

Commission  on  Compilation  of  Gen- 
eral Laws  

Volume  1  

19,999 

2,009 

24,993  21 

Annual  Report 

1916 

1  000 

52 

131  58 

S  tate  Sanatorium  

Biennial  Report  

1915—16 

700 

58 

158  19 

State  Veterinary  Board  

Annual  Report  

1916 

2,500 

64 

292  82 

Superintendent  of  Public  Instruction  . 

Annual  Report  
4nnual  Report 

1916 
1915 

7,700 
800 

316 
192 

2,630  39 
357  29 

Annual  Report  

1916 

800 

175 

352  59 

Mo  Bui  and  An  Summary 

1915 

1  000 

1  321  79 

Mo.  Bui.  and  An.  Summary  

1916 

1,000 

1,361  42 

$162,460  98 

Cost  of  paper  is  included  in  each. 


58 

STENOGRAPHIC  REPORT  OF  EXAMINATION  OF   STATE 

OFFICES 

Auditor  General's  Department. 

Mr.  Lord :     Mr.  Fuller,  when  did  you  become  Auditor  General  ? 

Mr.  Fuller :     January  1st,  1909. 

Mr.  Lord:     How  many  employes  were  in  the  department  at  that  time? 

Mr.  Fuller:     126. 

Mr.  Lord:  What  was  the  total  cost  of  the  clerical  force  that  first  year, 
or  for  the  year  previous  to  your  becoming  Auditor  General? 

Mr.  Fuller:     |1 .10,558.01. 

Mr.  Lord:  And  the  number  of  employes  that  you  have  at  the  present 
time,  Mr.  Fuller? 

Mr.  Fuller:     101. 

Mr.  Lord :     That  is  leaving  out  yourself,  Mr.  Hamilton  and  your  deputy  ? 

Mr.  Fuller:  104  altogether,  counting  the  three  inheritance  tax  ex- 
aminers. 

Mr.  Lord:  What  was  the  cost  of  clerical  help  during  your  last  fiscal 
year? 

Mr.  Fuller:     f 85,000.00. 

Mr.  Lord:  What  activities  of  this  department  did  you  have  in  11)01), 
when  you  became  Auditor  General,  that  have  been  eliminated 
or  taken  away  from  the  department  since  that  time? 

Mr.  Fuller :     Don't  know  of  anything. 

Mr.  Lord:  You  have  everything  now  in  the  department,  that  you  had 
at  that  time? 

Mr.  Fuller:     Yes. 

Mr.  Lord:  What  additional  activities  have  you  now — what  increase  in 
the  amount  of  work  that  you  have  to  do,  that  is  by  class,  or  classes 
or  work? 

Mr.  Fuller:  Well,  the  accounting  system  has  been  enlarged  by  taking 
in  the  boards  and  commissions  that  never  had  been  handled  by  this 
office.  When  I  first  was  Auditor  General,  the  only  account  was  state 
institutions,  now  there  are  fifty  boards  and  departments  that  have 
been  added.  Then,  there  is  the  mortgage  tax  collection,  the  tonnage 
tax  on  vessels,  liquor  license  (this  will  be  taken  away  next  year 
most  likely)  ;  medical  treatment  of  children  has  increased  materially. 
The  number  of  different  vouchers  that  have  to  be  handled  during  the 
year,  are  three  or  four,  yes,  ten  times  as  many  as  we  used  to  handle. 

Mr.  Lord:  Will  you  explain  about  the  treatment  of  these  indigent  chil- 
dren, the  procedure  of  getting  them  to  the  institution,  method  of  pay- 
ment for  maintenance,  etc.? 

Mr.  Fuller:  The  reason  for  the  increase  in  the  expense  is  on  account  of 
acts  passed  by  the  legislature  that  have  increased  the  number  of  chil- 
dren that  are  eligible.  When  the  law  was  first  passed,  it  only  took 
care  of  the  children  afflicted  with  malady  at  birth  and  requiring  the 
certificate  of  the  physician  acting;  then  they  later  let  down  the  bars 
by  taking  an  affidavit  of  any  physician  ;  then,  later  on,  the  law  was 
made  to  include  all  children  so  afflicted  whether  the  malady  was  at 
birth,  a  week  old,  or  a  later  time. 

Mr.  Lord:     How  is  their  maintenance  handled? 


59 

Mr.  Fuller:  By  the  Judge  of  Probate.  We  pay  on  his  approval, 
although  we  haven't  paid  all  the  claims ;  we  have  sent  a  good  many 
back  for  correction. 

Mr.  Lord :  These  new  and  increased  activities,  to  what  extent  do  they 
necessitate  additional  help  in  your  offices? 

Mr.  Fuller:  Well,  take  for  instance,  the  assessment  of  mineral  reserva- 
tions. While  in  existence,  it  cost  us  $25,000.00.  More  than  that, 
because  we  had  to  spend  some  time  on  the  records  to  charge  back  the 
unpaid  taxes,  and  there  was  an  increase  in  the  advertising  and  in 
the  clerical  work  on  account  of  it.  We  paid  about  $15,000.00  for 
advertising,  so  that  it  would  be  |40,000.00  that  it  cost  the  state. 

Mr.  Lord :  Now  then,  the  additional  work  in  the  collection  of  mortgage 
taxes;  the  increase  in  inheritance  tax  collections  and  the  tonnage 
tax  on  vessels,  has  necessitated  additional  help,  has  it  not? 

Mr.  Fuller:  Yes.  The  legislature  authorized  me  to  increase  the  inher- 
itance tax  force,  but  the  force  is  back  again  where  it  was  before, 
so  we  have  saved  the  state  $2,000.00  a  year  for  a  man's  salary  we 
don't  need.  Where  we  don't  need  people,  we  don't  put  them  on. 
One  thing  I  have  done  that  has  cost  considerable  money  is  the  plats. 
The  law  provides  that  the  plats  should  be  on  .file,  but  we  were 
hampered  by  not  having  the  plats  and  it  meant  considerable  expense 
to  the  counties  to  furnish  them.  I  sent  out  men  from  this  depart- 
ment and  made  copies  of  six  thousand  plats  that  we  did  not  have. 
I  tried  to  get  it  done  by  engineers,  but  the  best  price  I  could  get  was 
$5.00  a  plat ;  I  sent  out  men  from  here  and  got  them  at  a  cost  of 
about  62  cents  each. 

Mr.  Lord:  Now,  Mr.  Fuller,  tell  us  about  the  increase  in  vouchers,  the 
number  handled  ? 

Mr.  Fuller:  Well,  for  instance,  the  Public  Domain  Commission  used 
to  spend  about  $70,000.00  a  year  and  now  spends  $140,000.00  a  year; 
and  those  and  all  other  vouchers  have  to  be  signed  personally  by 
me,  which  is  some  additional  work  in  the  office. 

Mr.  Lord:  Have  you  any  idea,  or  rather  can  you  tell  the  number  of 
vouchers  that  went  through  your  office  the  first  year  you  were 
Auditor  General  and  the  number  of  vouchers  that  went  through  last 
year? 

Mr.  Fuller:  No,  I  haven't  got  that.  They  are  numbered,  but  a  great 
many  are  included  in  one  number;  for  instance.  No.  11102  might 
mean  one  voucher  and  No.  11103  might  mean  two  or  more  vouchers. 
There  were  approximately  100,000  last  year.  I  have  hesitated  a  long 
time  about  putting  on  an  additional  clerk  as  Voucher  Clerk  to  keep 
a  record  of  the  number  of  vouchers  for  every  institution,  and  others, 
and  I  have  about  decided  that  I  will.  We  could  then  tell  the  date, 
etc.,  of  all  vouchers ;  what  George  Lord  gets,  or  what  anybody  else 
gets.  T  have  hesitated,  as  I  don't  like  to  incur  additional  expense. 

Mr.  Lord:     Is  your  office  under  the  state  graded  salary  law? 

Mr.  Fuller :  Yes.  There  are  ten  statutory  positions  in  the  department, 
the  others  are  extra  clerks.  I  carry  the  clerks  in  two  divisions; 
clerks  on  taxation  work,  and  on  accounting  and  the  deputy's  room. 

Mr.  Lord :  You  made  the  statement  to  me  at  one  time,  Mr.  Fuller,  that 
you  thought  there  were  too  many  people  working  for  the  state.  Does 
that  have  any  reference  to  your  department? 


60 

Mr.  Fuller:  What  I  said  applied  to  the  commissions  that  we  have  who 
send  out  men  around  the  state.  It  has  occurred  to  me  that  if  a 
man  was  going  into  a  town  to  examine  the  conditions  of  a  factory, 
there  is  no  necessity  for  another  man  to  go  and  examine  a  fire  escape 
or  a  hotel ;  it  looks"  to  me  as  though  there  were  too  many  employed 
in  these  different  departments. 

Mr.  Lord:  I  asked  that  question  to  find  out  whether  any  clerks  have 
been  thrust  upon  you  in  your  department.  What  are  the  qualifica- 
tions for  a  position  in  your  department? 

Mr.  Fuller:     There  are  not  any. 

Mr.  Lord:  Are  they  appointed  on  politicians'  recommendations  or  rec- 
ommendations as  to  their  ability? 

Mr.  Fuller:  No  and  yes.  When  I  need  a  clerk,  for  instance,  I  would 
ask  you  if  you  knew  of  anybody,  and  if  you  said  ''yes,"  I  might  take 
him,  but,  if  I  didn't  need  a  clerk,  I  wouldn't  take  him  if  lie  had  all 
the  backing  in  his  county. 

Mr.  Lord:  What  course  do  you  follow  when  you  find  you  have  any 
incompetent  help  ? 

Mr.  Fuller:  Well,  of  course,  some  of  the  clerks  don't  amount  to  much, 
and  we  don't  always  keep  them,  but,  under  the  graded  salary  law,  it 
pays  to  have  a  few  of  those  clerks.  If  you  recognize  the  ability  of 
your  better  clerks  where  you  are  limited  to  an  average  salary,  where 
somebody  is  above,  why  somebody  has  to  be  below. 

Mr.  Lord:  Do  you  appoint  any  clerks  in  the  department  without  polit- 
ical influence? 

Mr.  Fuller:  Well,  political  influence  .used  to  govern  entirely,  but  only 
recently  I  have  sort  of  gotten  away  from  it  as  much  as  possible.  It 
is  true  that  the  best  clerks  are  those  that  have  no  political  backing. 

Mr.  Lord :  Well,  that  has  been  the  weak  point  in  the  method  of  getting 
help  in  the  capitol;  political  influence  has  been  brought  to  bear  too 
much. 

Mr.  Fuller:  Men  and  women  come  to  me  and  tell  me,  "Why,  you  must 
let  these  people  go  and  put  on  somebody  else  for  the  sake  of  politics; 
my  county  has  never  had  anybody  here  and  we  demand  that  you  let 
somebody  else  go  and  give  someone  else  recognition." 

Mr.  Lord:  Did  it  used  to  be  a  requirement  that  the  chairman  of  the 
Kepublican  Committee  had  to  endorse  the  application  of  a  clerk? 

Mr.  Fuller:  Don't  know  as  to  that — not  since  I  have  been  here.  I  have 
tried  as  much  as  possible  to  get  as  many  counties  in  the  state  repre- 
sented as  I  could — this  is  a  state  institution.  Of  course,  Ingham 
County  (and  it  would  be  the  same  with  any  capitol  county)  has  more 
people  than  any  other  county. 

Mr.  Lord:  Tell  us  about  vacations  of  your  clerks — what  they  are 
allowed? 

Mr.  Fuller:  The  vacation  allowance  is  too  much.  There  is  no  state, 
nor  municipality  or  government,  that  gives  the  clerks  the  vacations 
that  the  state  of  Michigan  does.  Twenty-four  days  a  year  is  more 
than  they  would  get  anywhere  else,  and  they  look"  on  it  as  a  vested 
right.  In  exceptional  cases,  we  do  allow  more  than  twenty -four  days 
to  those  that  have 'hard  luck  or  something  like  that.  These  vacations 
cost  the  state  $60,000.00  a  year  for  payment  of  time  that  it  does  not 
get  the  benefit  of.  In  this  department  alone  it  amounts  to  |7,000.00 


61 

or  |8,000.00,  and  it  is  wrong,  absolutely  wrong.  The  clerks  work 
only  seven  hours  a  day,  you  know.  One  of  the  features  of  vacation 
is  that  your  better  clerks  rarely  take  the  full  amount.  Some  of  our 
good  clerks  will  have  only  eight  or  ten  days  a  year  and  our  poor 
clerks  will  take  fifty  if  they  can  get  them. 

Mr.  Lord:  Now,  Mr.  Fuller,  do  you  know  where  you  can  save  any 
expense  in  the  conduct  of  your  department;  do  you  know  how  and 
where  you  can  reduce  costs  and  maintain  the  efficiency  of  the 
department  ? 

Mr.  Fuller :  No,  I  don't  know  just  now.  I  try  to  reduce  all  that  I  can  at 
all  times. 

Mr.  Lord:     Have  you  ever  tried  any  machines  for  computing  interest? 

Mr.  Fuller:  We  have  some  of  those  machines  that  we  use  right  along 
in  the  department.  Mr.  Hamilton  has  a  Brunswick.  Guess  he  had 
it  before  anybody  else  had  one.  Since  then,  Mr.  Humphrey  in  the 
tax  department  got  one.  Also  has  a  comptometer. 

Mr.  Lord:  I  notice  that  you  get  about  100,000  duplicate  tax  receipts 
during  the  year.  Is  there  not  some  way  the  County  Treasurer  could 
make  a  report  to  you  without  sending  in  all  the  duplicate  receipts? 
Doesn't  this  fill  up  your  office  with  a  lot  of  stuff  ?  It  seems  a  rather 
cumbersome  method. 

Mr.  Fuller:  No,  I  don't  think  so.  Don't  think  any  other  way  would 
answer  the  purpose. 

Mr.  Lord :     Couldn't  they  be  copied  on  a  big  form? 

Mr.  Fuller :     But  we  would  not  have  a  copy  of  the  tax  receipt. 

Mr.  Lord:  But  the  County  Treasurer  would  have  a  copy  on  file.  All 
anyone  would  have  to  do  would  be  to  go  to  the  County  Treasurer. 

Mr.  Fuller:  But  they  do  their  business  here.  I  don't  think  it  would 
do.  For  instance,  if  a  man  paid  his  taxes  to  the  County  Treasurer 
at  a  certain  time,  and  later  inquired  here  about  them,  we  could,  under 
the  present  system,  turn  back  to  the  duplicate  receipt  and  see  the 
exact  description  that  he  paid  it  on.  The  other  way  might  be  less 
cumbersome,  but  it  would  not  be  as  authentic  information. 

Mr.  Lord :  Could  you  make  it  authentic  by  engaging  an  examiner  to 
verify  them? 

Mr.  Fuller :  You  would  not  want  to  wait  until  I  sent  a  man  to  Mason, 
would  you,  and  that  is  the  nearest  county  seat  to  Lansing.  You 
see,  it  is  not  so  much  the  error  of  the  County  Treasurer  as  the  man 
paying  taxes  on  the  wrong  description.  I  got  a  law  through  the 
legislature  last  winter  which  will  help  avoid  errors,  I  believe,  because 
I  have  provided  for  triplicate  instead  of  duplicate  receipts.  Hereto- 
fore a  tax  receipt  has  been  given  the  person  paying  his  taxes  and 
the  duplicate  sent  us.  Now  I  have  provided  for  a  triplicate  for  the 
County  Treasurer  to  have  in  his  office,  and  this  will  show  exactly 
what  he  took  the  money  on. 

Mr.  Lord :  It  struck  me  yesterday  and  also  the  other  commissioners,  as 
well,  that  it  was  rather  a  cumbersome  procedure. 
I  think  a  very  important  thing,  and  one  you  know  a  good  deal 
about,  is  what  duplications  of  work  exist  between  the  several 
departments  of  the  state  government.  For  instance,  between  your 
department  and  any  other  department. 


62 

Mr.  Fuller :  The  work  of  this  department  and  the  work  of  the  Board  of 
Auditors  in  auditing  accounts  is  practically  the  same.  Where  we 
pay  the  claim  that  has  gone  through  the  Board  it  means  that  we  go 
over  the  same  ground  the  Board  has  gone  over. 

Mr.  Lord :     What  are  your  ideas  for  remedying  this  condition  of  affairs  ? 

Mr.  Fuller:  Perhaps  "the  Board  of  Auditors  wouldn't  appreciate  what 
I  say,  but  I  don't  think  it  should  be  necessary  for  them  to  have  the 
clerical  force  doing  similar  work  done  in  this  department. 

I  don't  think  there  should  be  any  divided  responsibility  in  the 
matter.  I  think  the  Board  of  Auditors  should  be  maintained;  it  is 
absolutely  necessary  to  have  the  Board  to  pass  on  bills  where  the 
policy  of  the  state  would  be  called  into  question,  like  the  watei 
supply  at  Jackson.  The  state  should  pay  it,  and  it  was  done;  also 
execute  contracts,  etc.,  it  is  absolutely  necessary  to  have  such  a 
board  for  that.  But  the  idea  of  having  as  many,  or  more,  clerks 
than  we  have  here  for  auditing  is  not  right. 

Mr.  Lord:  It  certainly  is  a  duplication.  Do  you  know  of  any  other 
duplication  of  work  between  departments? 

Mr.  Fuller:  There  is  a  duplication  between  this  department  and  the 
Public  Domain  Commission  in  the  matter  of  examining  land.  There 
is  no  sense  in  sending  a  man  out  to  examine  land  to  deed  to  the 
state,  and  then  another  man  to  deed  the  same  land  from  the  state 
to  the  purchaser.  I  am  allowed  to  pay  $3.00  a  day  for  men  to 
examine  land.  Their  men  are  working  on  a  salary  of  $3.00  to  $5.00 
a  day  and  they  get  their  full  month's  salary,  and  soak  me  $4.00  o* 
$5.00  a  day  for  the  work  they  do  for  me. 

Mr.  Lord :  How  many  of  those  deeds  do  you  issue,  on  an  average,  during 
a  year? 

Mr.  Fuller:  We  issue  about  10,000  a  year.  It  seems  to  me  that  this 
work  could  all  be  done  by  men  working  for  the  Public  Domain 
Commission.  It  would  save  approximately  $5,000  a  year. 

Mr.  Thompson:  Mr.  Fuller,  the  present  system  is  to  deed  forfeited  tax 
lands  to  the  Public  Domain  Commission  ? 

Mr.  Fuller:     Yes. 

Mr.  Thompson :     What  is  the  reason  that  that  should  be  done? 

Mr.  Fuller:  The  Public  Domain  Commission  took  the  place  of  the  land 
department. 

Mr.  Thompson:     Why  couldn't  they  be  handled  from  this  department? 

Mr.  Fuller:  They  could.  We  could  just  as  well  sell  from  our  records 
as  to  make  a  copy  of  the  record  and  give  it  to  somebody  else  to  sell 
from. 

Mr.  Thompson :     What  are  the  elements  that  it  adds  to  the  expense? 

Mr.  Fuller :  Practically  the  entire  force  of  the  Public  Domain  Commis- 
sion, the  clerks.  One  man  here  with  the  records  we  have  could  do 
all  the  ten  people  over  there  could. 

Mr.  Thompson :  How  about  the  cost  of  making  and  recording  the  deeds, 
would  that  be  sufficient  to  consider  in  that  manner? 

Mr.  Fuller :     It  would  not  cost  much  to  make  the  deeds. 

Mr.  Thompson :  How  many  clerks  from  your  department  do  you  have 
to  make  the  deeds  ? 

Mr.  Fuller :  Three  who  deed  all  the  lands  that  are  deeded  to  the  state, 
but  they  do  other  work  also. 


Mr.  Thompson :    What  does  it  cost  to  record  these  deeds  ? 

Mr.  Fuller:     Fifty  cents  each. 

Mr.  Thompson :  What  proportion  of  the  Public  Domain's  land  work  is 
devoted  to  tax  forfeited  lands? 

Mr.  Fuller :     Practically  all  of  it ;  they  have  very  little  land  now. 

Mr.  Thompson:  Would  you  recommend  that  they  be  handled  by -the 
Auditor  General? 

Mr.  Fuller :  At  the  time  the  land  department  was  abolished,  I  advised 
letting  it  alone  because  it  would  not  be  only  a  short  time  before 
the  land  department  would  go  out  of  business  by  its  own  weight. 

Mr.  Lord:  You  could  take  over  the  larger  part  of  the  work  done  by 
the  Public  Domain,  couldn't  you? 

Mr.  Fuller:     Insofar  as  the  sale  of  state  lands  is  concerned,  yes. 

Mr.  Thompson:  Would  it  be  necessary  to  have  an  agent  through  the 
state  to  take  care  of  the  other  business  that  the  Public  Domain 
handles  ? 

Mr.  Fuller :  They  handle  the  forestry.  Have  seven  state  forests.  They 
are  re-foresting  in  some  places  and  in  other  places  are  protecting 
the  forests  from  fires,  etc.  We  can't  find  fault  with  that.  However, 
they  started  in  with  an  appropriation  of  f  15,000.00  in  1911  and  now 
they  are  getting  $160,000.00  this  year  and  $140,000.00  last  year. 

Mr.  Lord:  What  ideas  have  you  relative  to  the  consolidation  of  com- 
missions, boards  and  departments  ?  What  boards  and  what  commis- 
sions would  you  have  consolidated  in  order  to  save  expense  and  to 
increase  efficiency  in  the  work  of  the  state? 

Mr.  Fuller:  Well,  I  am  not  prepared  to  say  who  should  be  put  out  of 
business.  Don't  know  as  I  have  any  recommendation  on  that. 

Mr.  Lord:  You  rather  think  there  are  too  many  commissions  and 
boards  ? 

Mr.  Fuller:  We  have  enough,  and  they  have  too  many  agents  doing 
different  classes  of  work.  One  man  could  do  more  than  one  thing 
at  a  time.  They  have  their  special  agents  for  this  thing  and  that 
thing,  and  it  looks  as  though  one  man  going  to  a  town  could  do  a 
lot  of  things. 

Mr.  Lord :     What  do  you  mean  by  that  ? 

Mr.  Fuller:  Well,  as  I  mentioned  a  while  ago  in  the  case  of  the  hotel 
and  factory,  what  is  the  use  of  two  inspectors  going  to  the  one 
town? 

Mr.  Lord :  In  the  matter  of  the  handling  of  cash  by  state  institutions, 
have  you  any  suggestions  to  make  as  to  improvement  in  methods? 

Mr.  Fuller:  I  certainly  don't  think  that  the  present  system  of  deposit- 
ing money  in  the  treasury  of  each  institution  is  good.  In  the  first 
place,  if  a  bill  would  come  here  before  it  was  paid,  I  think  there  are 
a  good  many  bills  that  would  be  reduced  materially ;  but  if  two,  three 
or  four  men  are  together  and  nobody  knows  what  they  are  doing, 
and  a  bill  comes  in  for  a  certain  price  for  a  commodity,  they  pass 
it;  but  if  that  same  thing  had  to  come  up  here  or  somewhere  else, 
where  it  would  be  criticised,  they  might  be  more  particular  with 
their  dealer  and  get  better  prices. 

Mr.  Lord:  Your  suggestion  is  that  the  money  remain  in  the  State 
Treasury,  except  that  an  institution  should  be  allowed  a  certain 
amount  for  petty  purposes? 


64 

Mr.  Fuller:  At  the  time  we  had  to  send  out  and  borrow  $  150,000.00  and 
had  to  pay  interest  on  it,  there  was  one  half  million  dollars  of  state 
money  in  the  various  treasuries  of  state  institutions  that  we  could 
not  touch  at  that  time. 

Mr.  Lord:     What  interest  did  you  pay? 

Mr.  Fuller:  Not  much,  2%%,  I  believe.  When  we  audit  claims  of  the 
state  institutions,  our  audit  does  not  amount  to  much.  When  we 
audit  the  claim  the  other  fellow  has  the  money.  This  morning  I 
instructed  Mr.  Hamilton  to  send  some  bills  back  to  the  State  Board 
of  Education  and  tell  them  they  would  have  to  make  some  items 
good  or  next  time  we  would  not  pay  them. 

Mr.  Lord:  We  have  discovered  in  visiting  the  Normal  Schools  that 
there  is  charged  to  the  appropriation  made  to  the  Normal  School  a 
certain  amount  for  salary  for  the  treasurer  of  the  State  Board  of 
Education  ;  is  that  legal  ? 

Mr.  Fuller:  I  think  the  matter  is  under  the  jurisdiction  of  the  State 
Board  of  Education.  The  appropriation  is  made  to  the  Normal 
School  and  handled  by  the  Board  of  Education. 

Mr.  Lord :  Can  they  use  it  for  purposes  outside  of  what  the  appropria- 
tion is  for? 

Mr.  Fuller:  There  is  so  much  for  special  purposes  and  so  much  for 
current  expense  items. 

Mr.  Lord:     You  say  the  State  Board  handles  the  money? 

Mr.  Fuller:  Yes,  and  deposit  is  made  in  local  banks  for  the  normal 
schools  under  direction  of  the  board,  of  course. 

Mr.  Lord :     Do  you  like  that  way  of  doing  business? 

Mr.  Fuller:  It  is  lame,  of  course.  Take  the  Treasurer  of  the  institution 
at  Coldwater.  We  pay  him  $(100.00  a  year  out  of  the  general  fund, 
and  the  Secretary  of  the  College  gets*  $1,000.00  a  year  out  of  the 
general  fund ;  now,  those  things  ought  to  be  paid  from  the  appropria- 
tion made  to  the  institutions. 

Mr.  Lord:  Your  opinion  is  that  it  is  altogether  too  much  of  a  drain  on 
the  general  fund  of  the  state? 

Mr.  Fuller:  Well,  it  is  perhaps  the  fault  of  the  legislature.  They  make 
appropriations  for  different  departments,  then  put  in  a  clause  that 
they  may  draw  this  and  that  from  the  general  fund.  For  instance, 
the  Labor  Commissioner  gets  #40,000.00  to  $00,000.00  a  year,  but 
some  things  come  out  of  the  general  fund,  such  as  printing,  binding, 
etc.,  so  that  you  never  know  how  much  the  institution  or  department 
is  costing. 

Mr.  Thompson:  What  do  you  think  of  the  policy  of  the  state  building 
private  hospitals  in  connection  with  general  hospitals? 

Mr.  Fuller:     It's  all  bunk.    I  told  the  Governor  so  at  the  time. 

Mr.  Thompson:  Have  you  given  any  thought  as  to  the  employes  of 
the  state  institutions  buying  from  state  stores  ?  What  do  you  think 
of  that  practice? 

Mr.  Fuller:  It  is  not  good  in  some  cases,  and  yet  what  harm  does  it 
do?  It  is  not  a  good  plan,  there  isn't  any  question  about  that,  but 
when  you  get  down  to  it,  who  is  hurt?  '  The  policy  is  wrong,  but 
who  is  hurt?  I  had  some  cases  of  that  in  this  department,  and 
while  I  was  stopping  it,  I  did  not  think  anybody  was  being  hurt. 


65 

Mr.  Thompson:  How  about  the  title  to  deeds  and  title  to  state  prop- 
erty? 

Mr.  Fuller:  They  ought  to  be  here.  We  have  some  cases  where  we 
don't  know  whether  it  belongs  to  the  state  or  not.  The  title  to  all 
property  should  be  filed  in  this  office. 

Mr.  Thompson:  There  are  a  number  of  institutions  that  you  have  no 
deeds  for,  are  there  not? 

Mr.  Fuller:  Well,  some  of  the  titles  are  here,  the  Secretary  of  State  has 
some.  The  Industrial  School  for  Boys  had  to  go,  not  long  ago,  to 
the  Register  of  Deeds  and  have  a  certified  copy  made  of  their  deed. 

Mr.  Lord:  Going  back  to  the  handling  of  cash  by  state  institutions, 
what  disposition  is  made  of  unspent  balances  at  the  end  of  the 
fiscal  year? 

Mr.  Fuller:  It  goes  back  into  the  general  fund.  We  charge  out  the  15th 
of  December  following  the  end  of  the  fiscal  year.  Take  the  Michigan 
School  for  Blind.  It  has  f  10,000.00  left  at  the  end  of  the  fiscal  year. 
It  can  use  it  between  then  and  December  15th ;  that  is,  between  July 
1st  and  December  15th,  to  pay  bills  incurred  before  June  30th.  If  it 
has  not  paid  out  money  by  December  15th,  we  charge  it  back. 

Mr.  Thompson:     Who  prepared  the  general  purpose  bill? 

Mr.  Fuller:     Hamilton  prepares  it. 

Mr.  Thompson  :  Do  you  investigate  any  as  to  the  amounts  due  the  state 
for  the  support  of  insane  or  other  state  patients;  where  their  rela- 
tives are,  or  who  should  take  care  of  them? 

Mr.  Fuller:     We  do  not. 

Mr.  Thompson:     Don't  you  think  it  would  be  well  to  do  so? 

Mr.  Fuller:  The  heads  of  the  institutions  are  required  by  law  to  report, 
and  in  cases  where  they  do,  we  turn  it  over  to  the  Attorney  General. 
The  last  legislature  suggested  the  idea  to  go  out  and  investigate, 
but  there  was  a  doubt  as  to  whether  there  would  be  enough  to  pay 
the  salary  of  an  investigator. 

Mr.  Thompson:  What  do  you  think  of  the  fire  insurance  fund  in  the 
state  ? 

Mr.  Fuller :  I  am  not  in  favor  of  it,  don't  think  it  was  necessary,  think 
the  whole  thing  was  poor.  Under  the  old  system  there  was  always 
|1QO,000.00  the  Board  of  Auditors  could  use  to  replace;  and  up  to  the 
burning  of  the  school  at  Flint  it  never  exceeded  $6,000.00  a  year. 

Mr.   Lord :     1  think  as  you  do  that  the  former  system  is  best. 

Mr.  Fuller:  It  makes  a  lot  of  unnecessary  bookkeeping  and  you  come 
out  where  you  went  in. 

State  Accountant. 

Mr.  Lord:  Xow,  Mr.  Hamilton,  please  state  to  the  commission  in  a 
general  way  what  your  duties  are. 

Mr.  Hamilton :  Computing  the  state  tax,  taking  care  of  all  the  vouchers, 
receipts  and  disbursements  of  the  state  institutions,  also  of  a  good 
many  of  the  boards  that  have  to  file  accounts  with  us,  and  we  have 
complete  charge  of  the  funds  that  go  to  the  institutions.  We  also 
have  charge  of  the  inheritance  tax  work.  The  inheritance  tax  exami- 
ners are  all  under  our  charge.  We  also  settle  with  all  the  County 
Treasurers. 


66 

Mr.  Lord :  Do  you  prepare  the  blanks,  etc.,  used  by  the  state  institutions 
and  others? 

Mr.  Hamilton :  Mr.  Woodhouse  has  charge  of  all  printing  of  vouchers, 
blanks  for  County  Treasurers,  state  institutions,  etc. 

Mr.  Lord:     Do  you  make  up  the  forms  in  this  office? 

Mr.  Hamilton:  Well,  if  any  of  the  institutions  or  state  departments 
want  blanks,  they  apply  here.  The  actual  printing  is  done  under 
state  contract,  but  the  forms  are  made  up  here. 

Mr.  Lord :     Do  all  the  institutions  use  the  same  form  vouchers  ? 

Mr.  Hamilton :  Vouchers  for  state  institutions  practically  are  all  made 
a  certain  way ;  the  form  is  prescribed  by  the  Auditor  General  accord- 
ing to  law. 

Mr.  Lord:  Do  you  do  all  the  auditing  for  the  state  institutions  and 
boards  ? 

Mr.  Hamilton:  We  audit  the  accounts  of  the  state  institutions  and 
boards  insofar  as  it  refers  to  the  funds  that  they  obtain  from  the 
State  Treasurer. 

Mr.  Lord :  Do  you  require  a  report  of  receipts  from  sources  other  than 
from  the  State  Treasurer  and,  if  so,  what  is  the  nature  of  your 
audit  of  such  receipts? 

Mr.  Hamilton :  They  file  their  reports  with  us  for  receipts  and  abstracts 
of  receipts.  If  for  instance,  there  were  earnings  from  the  green- 
house, or  the  sale  of  products  from  the  farm,  they  would  have  to 
account  for  that  in  that  manner.  In  fact,  our  audit  consists  of  an 
audit  of  all  reports  that  they  make  to  the  accountant's  office. 

Mr.  Lord:  The  hospitals  in  their  reports  to  the  Auditor  General  are 
required  to  give  the  name  and  address  of  each  patient ;  what  is  the 
object  of  this? 

Mr.  Hamilton:  It  is  absolutely  necessary  that  we  have  this  informa- 
tion in  order  that  we  know  from  what  county  every  patient  is  from. 
You  understand  that  they  are  county  charges  for  a  year,  and  after 
that  they  become  state  charges. 

Mr.  Lord:  What  is  the  method  of  disbursing  the  moneys  appropriated 
to  state  institutions? 

Mr.  Hamilton:  All  state  moneys  are  disbursed  by  the  State  Treasurer 
on  warrant  of  the  Auditor  General.  These  disbursements  are 
made  periodically.  Every  institution  has  to  file  an  itemized  state- 
ment every  three  months  showing  for  what  purpose  moneys  have 
been  expended.  For  instance,  every  institution  is  supposed  not  to 
have  more  than  25  per  cent  on  hand  of  the  amount  previously  drawn 
when  it  makes  another  request  for  money  to  cover  current  expenses. 
When  such  a  request  is  made,  we  immediately  look  up  the  account 
and  ascertain  what  amount  the  institution  has  on  hand,  and  thus 
try  to  keep  them  to  the  25  per  cent  limit.  If  it  is  a  fact  that  the 
institution  has  more  than  that  on  hand,  we  ask  for  advanced  vouch- 
ers— vouchers  that  have  been  previously  paid  and  not  forwarded 
to  us. 

Mr.  Lord:     Is  there  any  chance  for  a  state  institution  to  spend  moi 
money  than  the  amount  appropriated  for  current  expenses? 

Mr.  Hamilton :     No ;  it  cannot  spend  any  more.     Sometimes  when  it 
absolutely  necessary  to  do  so,  the  Auditor  General  advances  an  insti- 
tution money  and  the  amount  advanced  is  deducted  when  the  nexl 


67 

installment  is  sent  to  it.  In  emergency  cases  the  Auditor  General 
has  authority  to  use  his  own  judgment. 

Mr.  Lord :     What  is  the  method  of  disbursing  special  appropriations  ? 

Mr.  Hamilton:  On  the  requests  for  special  appropriations,  there  is  an 
oath  at  the  bottom,  signed  and  sworn  to  by  a  majority  of  the  members 
of  the  board,  that  these  funds  are  wanted  for  the  current  month. 
Boards  have  made  that  statement  and  then  not  used  the  money  for 
six  months. 

Mr.  Thompson:  When  we  were  at  Kalamazoo  they  stated  that  they 
owed  $69,000.00  for  current  expenses  and  could  only  at  that  time 
(early  this  month)  get  $35,000.00  from  the  state,  which  would  leave 
them  owing  about  $35,000.00  and  the  first  of  next  month  another 
$70,000.00. 

Mr.  Hamilton :  We  have  already  advanced  them  $30,000.00  or  $40,000.00 
above  their  per  capita ;  we  have  to  do  this  on  account  of  purchase  of 
coal  and  other  commodities  that  have  advanced  so  in  prices.  How- 
ever, the  Joint  Board  of  Trustees  of  State  Hospitals  has  advanced 
the  per  capita  rate  to  71  cents  so  that  we  expect  to  get  this  paid 
back  when  they  draw  the  moneys  at  the  advanced  rate.  Their  per 
capita  last  year  was  53  cents. 

Mr.  Lord :  What  is  the  order  of  procedure  in  auditing  the  accounts  of 
the  various  institutions? 

Mr.  Hamilton:  Mr.  Griswold  and  myself  do  the  auditing.  Sometimes 
we  do  it  together  but  usually  one  of  us  does  the  work,  sometimes 
taking  a  clerk  with  us.  We  go  to  the  institution  and  ask  to  see  its 
accounts  current.  We  take  that  account  current  and  see  how  much 
money  it  has  on  hand,  then  we  get  statements  from  the  banks  show- 
ing what  its  balances  are;  then  we  go  back  to  the  institution  and 
take  its  accounts  from  that  time  on  up  to  date  and  see  how  much 
it  has  spent  and  how  much  it  has  received.  We  then  count  cash  on 
hand.  We  also  examine  its  voucher  registers  and  see  what  outstand- 
ing vouchers  it  has  and  give  it  credit  for  them. 

Mr.  Lord:     Do  you  have  any  knowledge  of  what  each  institution  owes? 

Mr.  Hamilton:  We  never  know  how  much  any  institution  owes.  It 
would  be  an  immense  job  to  find  out  but  most  of  the  institutions  pay 
right  up  to  date. 

Mr.  Hamilton:  For  instance,  I  have  just  had  a  letter  from  Jackson 
Prison  telling  what  their  bills  receivable  and  bills  payable  are. 

Keceivable  Sept.  1st,  $410,746.36. 
Payable      'Sept.  1st,    801,488.92. 

Mr.  Lord:     Have   you   ever   discovered   at   Jackson   Prison   any   book 

account  showing  amount  of  bills  payable? 
Mr.  Hamilton:     No. 
Mr.  Lord :     As  an  actual  fact,  do  you  know  that  it  has  ever  had  any  book 

account  ? 

Mr.  Griswold :     I  never  saw  one. 
Mr.  Hamilton:     This  is  the  first  statement  I  have  ever  got  from  that 

institution.      I   started   making   requests    for   same   when    it   first 

started  its  revolving  fund  in  1907. 
Mr.  Lord :     After  a  lapse  of  ten  years  you  have  its  first  report— the  first 


you  have  ever  received  of  the  amount  of  indebtedness  of  the  insti- 
tution. 

Mr.  Hamilton:  I  will  say  this  for  Jackson  Prison.  I  don't  think  I 
ever  went  there  and  checked  them  out  that  we  did  not  come  out 
within  a  few  cents  of  the  amount  the  institution  had  on  hand  in 
the  banks,  but  insofar  as  to  what  its  assets  and  liabilities  were,  we 
knew  nothing,  and  don't  today. 

Mr.  Lord:  Did  you  ever  make  a  verification  of  any  earnings  of  the 
institution  ? 

Mr.  Hamilton:  All  we  know  is  that  it  don't  draw  any  money  for  cur- 
rent expenses,  but  as  to  how  much  it  is  in  debt,  we  did  not  know 
until  we  got  this  statement. 

Mr.  Lord :  Would  it  not  be  possible  for  you  to  audit  its  accounts  and 
get  this  information? 

Mr.  Hamilton:  It  would  be  a  tremendous  job  because  the  volume  of 
business  is  so  great. 

Mr.  Lord:  Well,  take  the  Keo  Manufacturing  Plant  for  example,  it 
would  not  be  a  very  difficult  matter  for  their  accountant  or  book- 
keeper to  ascertain  what  the  earnings  are,  why  should  it  be  for  a 
state  institution  ? 

Mr.  Hamilton:  Well,  it  is  different,  with  an  automobile  concern;  they 
make  only  one  thing;  the  prison  runs  a  large  number  of  farms  and 
when  you  come  right  down  to  know  what  the  farm  pays,  ,011  have  a 
hard  proposition. 

Mr.  Lord:  You  could  have  a  ledger  account  of  receipts  and  expenditures 
for  the  farm  and  strike  a  balance  at  any  time,  couldn't  you? 

Mr.  Hamilton:  They  have  had  no  general  ledger  accounts.  Of  course, 
the  accounting  laws  don't  require  that;  they  require  the  voucher 
system. 

Mr.  Lord:  We  have  a  law  in  this  state  requiring  the  Auditor  (ieneral 
to  prescribe  and  establish  a  uniform  system  of  accounting  for  state 
institutions;  have  vou  ever  complied  with  the  requirements  of  this 
law  ? 

Mr.  Hamilton:  That  does  not  wipe  out  the  voucher  system.  AVe  have 
tried  to  adopt  a  uniform  system  with  what  help  we  have  had,  but 
the  main  point  in  that  law  was  the  uniform  system  for  county 
officers  which  was  wiped  out  by  the  proviso  that  the  counties  need 
not  come  under  it  unless  they  voted  too. 

Mr.  Lord:  You  say  you  have  established  a  uniform  system  of  account- i 
ing? 

Mr.  Hamilton:     The  same  system  we  have  always  had. 

Mr.  Lord:  Is  there  an  institution  in  the  state  that  has  a  complete 
system  of  books  such  as  you  would  have  if  you  were  operating  a 
private  business? 

Mr.  Hamilton :  I  don't  believe  you  can  run  a  state  institution  the  sam< 
way  as  you  would  a  private  concern.  You  could  have  a  set  of  books 
at  the  state  institutions,  but,  of  course,  we  have  not  required  the 
books.  We  have  the  voucher  system  and  they  account  to  us  in  thai 
way  for  all  the  money  they  draw  from  the  state  or  from  othei 
sources. 

Mr.  Lord :  Take  Jackson  Prison,  for  instance ;  in  September  the  prison 
was  in  debt  f800,000.00  gross,  and  had  a  net  indebtedness  of 


$400,000.00.  Don't  you  think  the  system  of  bookkeeping  in  that  insti- 
tution should  be  such  that  it  would  be  possible  for  the  state  to 
ascertain  exactly  what  the  aggregate  indebtedness  of  the  institution 
is,  and  the  nature  of  such  indebtedness?  Isn't  it  a  fact  that,  under 
the  present  system,  this  information  is  difficult  to  get  and  that  the 
only  way  it  can  be  ascertained  is  the  opening  up  of  a  new,  complete, 
modern  system  of  bookkeeping? 

Mr.  Hamilton :     No  question  about  it,  that  is  right. 

Mr.  Lord:  Now,  Mr.  Hamilton,  don't  you  think  it  is  right  and  proper 
that  the  people  of  the  state  should  know  just  what  every  institution 
is  doing  by  way  of  borrowing  money  and  otherwise  incurring 
indebtedness?  You  remember  that,  while  on  a  recent  visit  to  the 
prison,  the  Budget  Commission  asked  the  Warden  if  he  knew  the 
actual  amount  the  institution  was  in  debt,  and  his  answer  was  that 
he  did  not  know,  but  hoped  to  find  out  by  the  first  of  next  July. 
Mr.  Hamilton,  what  would  be  your  remedy  for  this  state  of  affairs? 

Mr.  Hamilton  :  That  is  a  question,  and  a  big  question.  The  only  remedy 
would  be  to  have  a  complete  itemized  account  of  bills  receivable 
and  bills  payable  with  each  institution  that  we  do  business  with. 

Collection  of  Fees,  Etc. 

Mr.  Lord:  Under  our  laws,  as  you  know,  several  of  the  commissions, 
boards  and  offices  of  the  state,  collect  a  considerable  amount  of 
money  in  fees,  which  money  is  credited  to  the  particular  board, 
commission  or  office  making  collection,  and  is  used  for  payment  of 
its  operating  expenses.  This  constitutes  a  sort  of  sub-treasury  of 
the  state.  If  this  system  was  abolished  and  every  department  and 
institution  of  the  state  government  was  obliged  to  pay  its  current 
expenses  from  a  legislative  appropriation,  and  all  fees  collected 
turned  into  the  state  treasury  and  credited  to  the  general  fund, 
what  kind  of  a  voucher  system  would  take  care  of  it? 

Mr.  Hamilton:  We  were  confronted  with  this  and  I  believe  it  would 
work  a  hardship  not  to  allow  them  to  have  some  funds  on  hand. 

Mr.  Lord :  I  am  speaking  of  boards  and  commissions  that  collect  certain 
moneys. 

Mr.  Hamilton :  Under  the  new  law,  it  is  turned  into  the  state  treasury 
now,  but  credited  to  that  particular  commission. 

Mr.  Lord:  What  supervision  do  you  have  over  the  appropriation  made 
to  the  Michigan  Agricultural  Fair  Commission? 

Mr.  Hamilton :  The  treasurer  files  with  us  a  bond  before  he  can  draw 
the  money.  He  pays  each  fair  whatever  the  commission  says  the 
fair  should  have  and  he  files  with  us  an  itemized  statement  of  all 
expenditures,  and  a  list  of  the  fairs  that  receive  money.  If  there 
is  anything  left  he  turns  it  back  into  the  treasury.  A  year  or  two 
ago  they  drew  the  money  and  held  it  quite  a  long  time,  but  this 
year  Mr.  Fuller  and  I  talked  it  over  and  we  would  not  let  them 
draw  it  in  advance  of  their  needs. 

Mr.  Lord:     Where  is  this  money  deposited? 

Mr.  Hamilton:  The  money  has  been  deposited  with  the  Grand  Rapids 
Trust  Company.  The  state  got  interest  on  the  deposit. 

Mr.  Lord:  Mr.  Hamilton,  you  can  now  make  that  corrected  statement 
in  regard  to  report  of  bills  payable  and  receivable. 


70 

Mr.  Hamilton :  I  think  I  stated  this  morning  that  we  received  no  report 
from  the  institutions  relative  to  bills  payable  and  receivable.  We 
don't  insofar  as  our  own  knowledge  is  concerned,  but  we  do  receive, 
under  Act  183  of  the  Public  Acts  of  1.911,  an  annual  statement  which 
is  supposed  to  show  the  amount  of  bills  receivable  and  bills  payable 
at  the  end  of  the  fiscal  year,  which  is  June  30th.  In  some  cases 
they  have  not  always  furnished  it. 

Mr.  Lord:  When  did  you  get  the  first  statement  from  Jackson  Prison 
showing  bills  payable  and  bills  receivable? 

Mr.  Hamilton:  We  received  a  statement  in  the  aggregate  in  1913; 
that  is  the  first  we  got  after  this  law  of  1911  went  into  effect. 

Mr.  Lord:  So  that  you  requested  it  following  the  session  in  1907,  but 
got  it  in  1913  in  aggregate  form  ? 

Mr.  Hamilton :     Of  course,  this  was  a  verbal  request  I  made  in  1907. 

Mr.  Lord:  We  would  like  to  get  your  idea  as  to  what  should  be  done 
in  regard  to  the  condition  of  affairs  relating  to  state  sub-treasuries. 

Mr.  Hamilton :  I  would  rather  not  give  that  off-hand.  I  would  like  to 
think  it  over  a  little  as  I  have  not  given  it  much  attention.  Of 
course,  I  have  an  idea  in  a  round-about  way,  but  I  would  prefer  to 
let  that  pass  for  the  present  if  you  could.  You  refer  now  to  having 
funds  put  into  one  general  fund  in  the  state  treasury? 

Mr.  Lord :  All  bills  of  every  kind  or  description  to  be  paid  by  the  State 
Treasurer,  and  all  moneys  collected  to  be  paid  into  the  state  treasury. 

Mr.  Hamilton:  All  moneys  collected  under  the  1917  law  are  supposed 
to  be  turned  over  to  the  Treasurer  and  T  think  the  state  boards  are 
complying  with  that  request — most  of  them. 

Mr.  Lord :  You  say  that  all  the  fees  are  turned  in  now.  Is  it  not  a  fact 
that  the  State  Board  of  Accountancy  and  the  State  Board  of  Exami- 
ners of  Osteopathy,  and  three  or  four  other  boards,  do  not  turn  in 
any  money  at  all,  but  use  it  to  meet  their  expenses  ? 

Mr.  Hamilton :  If  there  is  any  balance  left,  they  turn  it  in  to  the 
treasury,  but  they  do  pay  their  own  expenses  out  of  the  fees. 

Mr.  Lord:     Does  that  condition  exist  in  spite  of  the  act  of  1917? 

Mr.  Hamilton:     No. 

Mr.  Griswold:  About  the  only  board  that  did  not  turn  it  in  as  they 
were  supposed  to  was  the  Board  of  Pharmacy;  they  insisted  on 
keeping  their  money  notwithstanding  that  we  asked  them  to  turn 
it  in. 

Mr.  Hamilton :  There  are  one  or  two  boards  that  we  have  no  control! 
over,  whatever.  They  handle  their  own  funds;  for  instance,  the 
Board  of  Dentistry.  That  is  the  only  board  I  know  of  that  don't! 
turn  its  balance  in  at  the  end  of  the  year.  It  collects  its  own  fees, 
from  which  it  pays  its  own  expenses.  This  board  makes  its  report 
to  the  Governor  and  not  to  the  Auditing  Department  of  the  state. 
There  is  no.  law  that  requires  it. 

Mr.  Lord:  Have  you  any  knowledge  whatever  of  the  aggregate  amount 
of  fees  collected  by  that  board? 

Mr.  Hamilton:  They  publish,  or  did  publish,  the  first  year  or  two  they 
were  in  existence,  a  report  that  showed  the  number  of  registered 
dentists  and  I  am  quite  sure  that  it  showed  the  amount  they  had 
collected  but  I  could  not  substantiate  that,  Mr.  Lord.  In  fact,  the 
board  never  sent  in  any  report  to  this  office.  The  law  creating  the 


71 

board  is  silent  on  the  subject  of  what  shall  be  done  with  its  surplus, 

if  it  has  any. 
Mr.  Thompson:     It  might  be  wise  to  ask  the  Attorney  General  for  an 

opinion  of  this  subject. 
Mr.  Lord:     Personally,  I  would  say  off-hand  that  they  would  have  to 

come  under  the  general  law.    Mr.  Thompson's  suggestion  is  a -good 

one,  to  get  an  opinion  from  the  Attorney  General. 
Mr.  Hamilton:     I  think  you  are  right  without  his  opinion.     The  law 

just  went  into  effect  in  August  and  we  have  not  had  much  time  and 

have  not  asked  them*  much  about  it. 

Mr.  Lord:     Have  you  asked  the  Dental  Board  for  a  report? 
Mr.  Hamilton :     I  don't  think  that  they  have  been  asked.    But  I  can't 

see  any  reason  why  they  would  not  come  under  the  general  law  the 

same  as  any  other  board. 
Mr.  Lord:     Mr.  Hauser,  have  you  a  record  of  those  that  comply  with 

that  act? 

Mr.  Hauser:     Yes. 
Mr.  Lord:     Will  you  have  your  stenographer  make  a  list  of  those  who 

complied  and  those  who  have  not  been  heard  from? 
Mr.  Hauser:     Yes. 
Mr.  Lord:     Tell  us,  Mr.  Hamilton,  in  a  general  way  what  the  duties  of 

your  department  are  in  regard  to  the  inheritance  tax. 
Mr.  Hamilton:     Well,  the  law  went  into  effect  in  1899  and  has  been 

amended  nearly  every  session  of  the  legislature.    It  is  all  under  the 

supervision  of  the  Auditor  General,  who  is  allowed  to  appoint  not 

to  exceed  four  examiners  who  visit  the  several  Judges  of  Probate 

throughout  the  state  and  ascertain  from  their  files  the  estates  from 

which  an  inheritance  tax  is  due.     They  assist  the  Judge,  when  he 

desires  them  to,  in  determining  the  tax. 

Lord :     How  many  men  have  you  now  ? 

Hamilton  :     We  have  only  three  now. 

Lord :     What  are  they  paid? 

Hamilton:     $2,000.00  a  year  and  expenses.     We  have  one  man  for 

Wayne  and  Kent  Counties ;  spends  all  his  time  in  those  two  counties. 
Mr.  Lord:  What  are  the  approximate  costs  for  the  year  of  this  work? 
Mr.  Hamilton:  It  would  approximate  f  12,000. 00  a- year,  and  we  took 

in  the  last  fiscal  year  f700.000.00  in  inheritance  taxes  and  interest. 

Of  course,  that  all  goes  to  the  Primary  School  Fund   so  the  general 

fund  really  suffers      We  have  received  of  late  years  a  very  large 

income  from  foreign  estates  owning  stocks  in  Michigan  corporations. 

For  the  sake  of  convenience  these  are  brought  before  the  Ingham 

County  Probate  Court. 
Mr.  Lord:     What   is   the  idea   of   having   one   department   collect   the 

inheritance  tax  and  another  department  collect  the  mortgage  tax, 

liquor  tax,  railroad  tax,  etc.?     Does  the  law  state  that  the  State 

Accountant  shall  collect  the  inheritance  tax? 
Mr.  Hamilton:     The  law  simply  states  that  the  Auditor  General  shall 

collect  the  tax. 
Mr.  Lord:     Why   not   have   one   department;    for   instance,    the    State 

Accountant  or  Deputy  Auditor,  have  charge  of  the  collection  of  all 

taxes  ?    Would  it  not  be  more  uniform  ? 
Mr.  Hamilton:     It  would  be  a  great  responsibility  on  one  man.     It  all 


72 

goes  on  one  set  of  books  upstairs.  Mr.  Hauser  has  general  super- 
vision of  the  books  and  over  the  entire  force.  There  is  nothing  in 
the  law  creating  these  new  divisions ;  we  have  established  them  f 01 
convenience. 

Mr.  Lord :     What  taxes  do  you  handle,  Mr.  Hauser  ? 

Mr.  Hauser:  Mortgage  tax,  tonnage  tax  on  vessels,  railroad  tax,  tele- 
phone tax,  etc. 

Mr.  Lord:  Mr.  Hamilton,  what  report  do  you  make  when  you  collect 
the  inheritance  tax  ? 

Mr.  Hamilton:  The  letter  comes  down  to  me  with  the  money  and  the 
order,  one  copy  for  us  and  one  for  the  Judge  of  Probate.  We  fill  it 
out  here,  take  it  up  to  the  bookkeeper.  It  is  countersigned  by  Mr. 
Hauser,  as  Deputy  Auditor,  and  the  receipt  of  the  County  Treasurer 
attached  to  it. 

State  Institutions'  Farm  Accounting: 

Mr.  Thompson:  In  one  or  two  cases  I  have  found  that  it  has  been  the 
custom  to  charge  up  all  the  products  of  the  farm  to  the  institution 
and  credit  them  to  the  farm  manager;  is  that  a  uniform  practice? 

Mr.  Hamilton:     Yes. 

Mr.  Thompson:  That  is,  if  I  were  the  farm  manager  for  the  institution 
in  question,  and  I  produced  |1, 000.00  worth  of  products,  the  method 
would  be  to  credit  me  up  with  $1,000.00.  Do  you  think  that  is  the 
best  way? 

Mr.  Hamilton:  It  works  out  very  satisfactory.  There  is  no  question 
but  that  improvements  could  be  made,  but  you  gentlemen  must  bear 
in  mind  that  a  state  institution  is  different  from  a  manufacturing 
plant.  The  Reo  plant  is  simply  manufacturing  one  article,  whereas 
the  Jackson  State  Prison  manufactures  various  articles.  This  farm 
question  is  a  puzzle  to  me,  it  always  has  been.  It  is  a  question  to 
me  as  to  whether  these  fancy  heads  of  cattle  pay  or  not.  They  claim 
they  do.  To  successfully  handle  the  State  Prison  so  that  the  Auditor 
General's  department  would  know  where  they  are  at  all  the  time,  I 
believe  it  would  require  a  special  accountant  from  this  department 
at  the  prison  all  the  time. 

Mr.  Lord:  Don't  you  think  that  this  fact  alone,  that  you  would  have 
evidence  of  the  indebtedness  of  the  institution,  would  make  it  worth 
the  cost  of  a  special  accountant  from  this  department? 

Mr.  Hamilton:  I  don't  believe  that  any  firm  of  certified  accountants 
would  or  could  find  out  exactly  where  they  are  at  in  three  months' 
time. 

Mr.  Lord :  If  you  had  a  proper  system  of  accounts,  you  would  not  have 
to  take  three  months  or  three  weeks  to  find  out  where  they  are  at? 

Mr.  Hamilton :  I  do  not  know,  perhaps  you  are  right,  but  I  would  have 
to  be  shown. 

Mr.  Thompson:  What  suggestions  have  you  to  make  as  to  changes  in 
laws  or  practices  that  will  benefit  the  state  of  Michigan? 

Mr.  Hamilton:  Most  every  state  institution  has  laws  that  have  been 
passed  that  sort  of  refer  to  that  one  institution.  This  would  all  have 
to  be  eliminated,  in  my  judgment,  and  a  law  enacted  for  each  class 
of  institutions. 


73 

Mr.  Hauser:  About  one-half  of  the  laws  on  the  statute  books  ought  to 
be  repealed  and  replaced  by  a  general  law,  classifying  them  along  the 
same  line. 

DEPARTMENT  OF  STATE. 

Vital  Statistics  Division:    William  F.  Petrie,  Chief. 

Mr.  Lord:  Mr.  Petrie,  will  you  state,  as  briefly  as  possible,  what  work 
you  do  here  in  your  division  ? 

Mr.  Petrie :  This  division  has  charge  of  the  records  of  all  births,  deaths, 
marriages  and  divorces  occurring  in  the  state.  Births  and  deaths, 
the  original  certificates  of  which  are  returned  to  us  monthly ;  that  is, 
every  township,  village  and  city  clerk  and,  in  some  instances,  the 
health  officer  of  the  city,  make  their  returns  to  us  on  the  4th  day  of 
every  month.  Marriages  are  returned  to  the  department  quarterly; 
that  is,  the  county  clerk  issues  a  license  for  the  marriage,  enters 
it  in  the  book,  and  when  marriage  is  returned,  he  completes  the 
record,  and  if  everything  is  complete  at  the  end  of  the  quarter,  he 
makes  a  transcript  of  that  record  and  sends  to  us ;  divorces  are  also 
returned  to  the  department  yearly,  on  the  1st  of  February. 
These  records  of  births,  deaths,  marriages,  divorces,  etc.,  are  all 
arranged  and  filed  by  counties,  alphabetically,  by  townships,  villages 
and  cities.  Every  certificate  has  a  registered  number  and  that 
number  is  continued  throughout  the  year,  consecutively  from  num- 
ber one  on  the  first  birth  and  first  death,  up  to  and  including  the  last 
one  in  December.  Those  are  put  in  books  by  years.  Marriages  or 
transcripts  of  records  of  marriages  are  bound  also  in  books,  just  as 
originally  received  from  County  Clerks. 

Mr.  Lord:  What  uses  are  those  records  put  to  after  you  receive  them 
in  this  department  and  have  them  bound? 

Mr.  Petrie:  Before  they  are  put  into  volumes,  I  issue  a  bulletin  of 
Vital  Statistics  every  month,  in  which  we  show  the  number  of  deaths 
from  each  county  and  city  separately,  and  also  show  the  number  of 
deaths  during  that  month  for  the  last  one,  two,  three  or  four  years ; 
also  show  the  number  of  deaths  from  diseases  that  have  been 
described  by  the  State  Board  of  Health  as  being  communicable ;  that 
is  done  in  order  to  give  the  State  Board  of  Health  notice  of  these  dis- 
eases. The  Health  Officer  is  required  to  make  a  preliminary  report 
to  them  when  the  person  is  taken  sick,  and  if  the  person  dies,  they  are 
supposed  to  make  final  report  to  that  effect.  The  publication  of 
these  bulletins  every  month  has  enabled  the  State  Board  of  Health 
to  find  a  whole  lot  of  cases  that  never  had  been  reported  to  them  by 
the-Health  Officer.  We  also  publish  in  the  same  bulletin  the  number 
of  births  occurring  in  every  county  during  a  month.  Next,  before 
we  do  any  binding,  we  make  a  transcript  of  every  death  certificate 
for  the  census  bureau  at  Washington,  for  which  we  receive  a  fee  of 
three  cents  each,  also  the  same  with  birth  transcripts. 

Mr.  Lord :  Can  you  tell  us  about  the  number  of  death  and  birth  certifi- 
cates received  every  year? 

Mr.  Petrie :  Number  of  birth  certificates  is  about  90,000  and  the  number 
of  deaths  is  about  45,000.  When  these  certificates  are  received,  we 
have  clerks  that  examine  them  for  missing  items;  for  instance,  the 


74 

undertakers  are  very  careless,  or  the  doctors  are,  as  to  entering  the 
cause  of  death,  or  it  might  not  be  entered  so  that  it  would  be  clear 
to  us,  and  in  those  cases  we  have  to  make  inquiries  immediately  as 
to  the  cause  of  death,  etc.  The  birth  certificates  are  examined  by 
clerks  as  to  missing  items  also  and  then  examined  as  to  date  of  filing. 
The  state  provides  for  a  fee  of  fifty  cents  to  physicians  for  filing  cer- 
tificates of  birth,  and  the  law  requires  that  these  shall  be  filed  within 
five  days  in  the  local  office.  If  the  date  of  filing  is  beyond  the  live-day 
limit  according  to  date  of  birth,  we  notify,  first  the  physician,  and  ask 
for  explanation  in  regard  to  delay,  and  then  if  the  doctor  comes 
forth  with  a  good  and  sufficient  assurance,  we  credit  him,  otherwise 
we  do  not.  That  is  quite  a  job  on  seven  or  eight  thousand  certifi- 
cates a  month.  We  also  keep  an  account  with  the  doctor,  showing  the 
number  filed  and  where  he  has  filed  them.  At  the  end  of  the  year,  we 
make  up  a  warrant  showing  the  amount  due  him.  This  can  be  cashed 
by  the  physician  at  the  County  Treasurer's  office. 

Mr.  Lord:  Do  you  do  any  work  here  similar  to  that  done  by  the  State 
Board  of  Health? 

Mr.  Petrie:  No.  They  get  out  a  report  of  the  number  of  deaths,  which 
they  are  supposed  to  get  from  the  Health  Officers,  but  we  furnish 
them  with  a  transcript  of  the  deaths  caused  by  communicable  dis- 
eases at  the  end  of  the  month.  If  we  did  not,  their  report  would  not 
amount  to  very  much,  as  the  average  Health  Officer  is  not  very  much 
on  clerical  work,  and  does  not  make  reports  as  he  should.  We  do 
this  because  we  think  it  ought  to  be  published. 

Mr.  Lord:     Do  you  publish  the  same  thing? 

Mr.  Petrie:  We  publish  an  annual  report;  they  come  over  here  and  get 
the  stuff  to  make  their  report  from.  If  their  records  don't  agree 
with  ours,  they  inquire  into  it  to  see  why.  The  total  number  of 
deaths  is  the  only  similar  work,  I  believe. 

Mr.  Lord:  Information  on  returns  that  you  get  is  published  first  in  this 
bulletin  and  again  in  your  annual  report? 

Mr.  Petrie:  This  is  only  published  monthly  and  shows  only  the  actual 
number.  We  send  out  eight  thousand  bulletins  every  month,  to  regis- 
trars, physicians,  universities,  etc.,  and  to  any  one  asking  to  have 
them  and  whose  name  is  on  our  mailing  list;  we  send  some  also  to 
foreign  countries. 

Mr.  Lord:    Approximately  100,000  published  a  year? 

Mr.  Petrie:    Yes. 

Mr.  Lord:     About  how  many  copies  of  your  annual  report? 

Mr.  Petrie:  Five  hundred  of  annual  report,  one  hundred  to  the  State 
Library  for  distribution  and  four  hundred  we  send  out. 

Mr.  Lord:     How  many  pages? 

Mr.  Petrie:     In  our  last  report  253  pages  without  the  index. 

Mr.  Lord:  Do  you  get  any  requests  for  these  reports  and  bulletins  from 
the  general  public? 

Mr.  Petrie :  No,  mostly  from  professional  men.  We  have  gotten  a  num- 
ber in  the  last  year  and  a  half,  lots  more  than  we  ever  did  before, 
from  the  children's  bureaus,  different  research  societies  and  universi- 
ties, probably  for  general  use  in  the  libraries. 

Mr.  Lord :  Have  you  any  clerks  in  this  division  not  up  to  qualification 
for  performing  their  duty  or  duties? 


75 

Mr.  Petrie :  I  am  frank  to  say  that  never  before  have  I  had  as  capable 
and  efficient  a  force  of  clerks  in  this  division  as  I  have  at  the  present 
time. 

Mr.  Lord:  Do  you  have  any  system  of  checking  the  amount  of  work 
done? 

Mr.  Petrie:  I  am  after  that  all  the  while  and  when  I  think  they  are 
not  getting  out  enough,  I  make  investigation  and  take  the  matter  up 
with  them.  There  was  a  time  when  I  used  to  keep  a  record,  but  it 
has  got  so  that  it  is  almost  impossible;  they  do  so  many  other  things, 
are  transferred  to  different  departments. 

Mr.  Thompson :  To  what  extent  do  you  copy  documents  that  are  sent 
out;  do  you  receive  pay  and  is  the  copy  an  exact  copy? 

Mr.  Petrie:  We  receive  a  fee  for  all  certified  copies.  I  have  kept  an 
account  of  these  fees  and  at  the  end  of  this  fiscal  year  I  will  be  able 
to  tell  you  just  how  much  money  the  department  took  in  for  this 
work.  We  have  taken  in  $40.00  since  the  first  of  August  for  certified 
copies  of  births  and  deaths;  also  we  get  $1.00  each  for  secret  mar- 
riages and  we  have  taken  in  $31.00  for  that.  We  also  get  a  fee  of 
$1.00  for  all  sub-registrars  licenses,  and  have  collected  $11.00  for 
that  since  the  first  of  August.  Since  July  27th  and  up  to  November 
10th  the  transcripts  to  Washington  have  amounted,  on  births  and 
deaths,  to  $1,729.00. 

Whipping  Division'.  William  L.  Brush,  shipping  clerk  of  department  and 
storekeeper. 

Mr.  Lord :  Mr.  Brush,  we  are  making  inquiry  as  to  the  various  clerks, 
and  you  will,  as  briefly  as  possible,  please  tell  us  what  your  duties 
are  in  the  department. 

Mr.  Brush :     I  have  charge  of  all  the  shipping,  everything  that  goes  out ; 
I  receipt  for  and  receive  all  supplies,  keep  accounts  with  the  printing 
office,  check  up  the  bills,  and  keep  up  the  stock.    Following  is  a  copy 
of  record  of  work  done  by  the  division  last  year : 
Received : 

00,000  Compiled  Laws. 
16,000  Public  Acts. 
32,000  Legislative  Manuals. 
250,000  Pamphlet  Laws. 

40,000  Reports  of  Departments,  Boards  and  Institutions. 
3,000  House  and  Senate  Journals. 
1,500  Local    Acts. 
800,000  Blanks  of  various  kinds. 
200  Tons  automobile  supplies. 
600  Express  shipments  other  than  above. 
54  Freight  shipments   other  than  above. 
Shipped  out: 

30,000  Compiled  Laws. 
14,000  Public  Acts. 
30,000  Legislative  Manuals. 
200,000  Pamphlet  Laws. 

40,000  Reports  of  Departments,  Boards  and  Institutions. 
10,000  Mail  orders. 


76 

Looked  after  stationery  and  kept  up  supplies  by  orders  signed  by 
Secretary  or  Deputy  Secretary  of  State.  Attended  to  all  shipments 
by  freight  or  express.  Checked  up  and  o.  k'd  all  bills  for  printing, 
express  and  freight.  Have  care  of  blanks  and  supplies  for  various 
departments. 

Summary:  Keceived  approximately  450  tons  of  books  and  papers. 
Shipped  out  approximately  400  tons  of  books  and  papers.  The  ship- 
ments were  as  follows:  736  freight  shipments  and  1,234  express 
shipments. 

M*.  Lord:  When  any  of  the  divisions  want  anything  from  the  shipping 
room,  what  is  the  procedure? 

Mr.  Brush:  General  supplies  are  given  as  they  ask  for  them,  but.  for 
anything  out  of  the  ordinary,  they  have  to  have  requisitions,  signed 
by  the  Deputy  or  the  Secretary  of  State.  The  giving  out  of  copies  of 
laws,  manuals,  or  Public  Acts,  or  anything  like  that,  requires  an 
order;  outside  of  that  we  give  them  out  without  an  order. 

Mr.  Thompson:  Do  you  keep  any  record  of  charges  made  against  the 
different  divisions? 

Mr.  Brush:     No. 

Mr.  Lord:  What  reports  and  documents  do  you  send  out  annually  to 
the  County  Clerks? 

Mr.  Brush:  We  send  out  annually,  the  principal  laws,  especially  a  large 
number  of  fish  and  game  laws,  manuals  and  public  acts;  also  blanks 
that  they  use  for  reports  to  this  office. 

Mr.  Lord :  Do  you  send  out  any  annual  reports  of  the  different  depart- 
ments from  this  office  ? 

Mr.  Brush :     We  have  a  supply  here,  but  send  them  out  only  on  request. 

Compiling  Division :    Herbert  Havens,  Chief. 

Mr.  Lord:  We  want  to  make  some  inquiry  concerning  the  work  of  this 
division  and  would  like  to  have  yon  explain,  as  briefly  as  possible, 
the  nature  of  its  activities. 

Mr.  Havens:  They  are  somewhat  varied.  We  begin  witli  preparing  the 
public  acts,  they  are  followed  with  the  local  acts  and,  subsequent  to 
those,  the  compilation  of  laws  as  required  by  Act,  44,  Public  Acts 
of  1899.  We  also  prepare  pamphlet  laws  and  compile  the  Michigan 
Legislative  Manual.  We  also  get  out  monthly  lists  of  automobile 
licenses. 

Mr.  Lord:  Your  work  here  all  consists  of  the  preparation  of  regular 
publications  authorized  by  the  state? 

Mr.  Havens :  Yes.  The  principal  work  is  compiling  laws  and  the 
manual ;  also  we  handle  nearly  all  the  publication  work  of  the  Depart- 
ment of  State. 

Mr.  Lord :  You  compile  everything  that  is  printed  for  use  of  the  various 
divisions  in  the  Department  of  State? 

Mr.  Havens :  There  is  an  exception,  that  of  Vital  Statistics  and  the  crop 
report  by  the  Agricultural  Division. 

Mr.  Lord:  Who  looks  after  the  blanks  used  by  the  corporation 
division  ? 

Mr.  Havens:     We  read  the  proof  on  most  of  them. 


77 

Mr.  Lord:  Do  you  make  any  report  to  the  Secretary  of  State  or  to 
the  Deputy  as  to  the  volume  of  work  you  do  during  the  month,  or 
during  the  year? 

Mr.  Havens:     Just  personal  observation  and  report. 

Mr.  Lord:  You  are  not  required  to  make  daily,  weekly  or  monthly 
reports  to  the  the  Secretary  of  State? 

Mr.  Havens :     Nothing  written. 

Mr.  Lord:  How  does  he  know  what  you  are  doing?  Does  he  make 
visitations  and  inquiries? 

Mr.  Havens :  Yes ;  he  is  here  every  other  day  or  so  inquiring  as  to 
our  work.  In  connection  with  the  department  we  keep  a  set  of 
county  records.  We  have  a  record  for  each  of  the  eighty- three 
counties  showing  original  organization  of  the  county,  and  go  into 
detail  showing  towns,  villages,  and  changes  in  boundaries,  etc. 
Copies  of  amendments  and  copies  of  revised  charters  are  filed 
here.  I  might  say  here  also  that  all  election  returns  are  tabulated, 
filed  and  recorded  in  this  office.  We  also  keep  a  file  of  enrolled 
acts  and  keep  track  of  correspondence  relating  to,  and  requests 
for,  certified  copies  thereof. 

Mr.  Lord:     What  do  you  charge  for  certified  copies? 

Mr.  Havens:     Twenty-five  cents  per  hundred  words. 

Corporation  Division:    Oliver  Spaulding,  Chief  of  Division. 

Mr.  Lord:  Will  you  tell  us  in  a  general  way,  Mr.  Spaulding,  what 
the  activities  of  this  division  are? 

Mr.  Spaulding:  In  general,  I  should  say,  they  would  follow  in  three 
classes;  the  work  I  attend  to  personally  is  the  examination  of  the 
papers  of  new  corporations  and  of  amendments  to  existing  char- 
ters, and  the  admission  of  foreign  corporations,  which  is  getting 
more  complex;  then  the  second  large  division  would  be  the  exami- 
nation and  filing  of  the  annual  reports  of  corporations.  There 
are  probably  twelve  or  thirteen  thousand  of  them  which  are  filed 
within  three  months,  usually.  We  take  care  of  quite  a  volume  of 
correspondence,  rather  casual  correspondence  about  certain  cor- 
porations ;  the  third  line  of  business  is  making  certified  copies, 
and  lists  of  stockholders,  which  brokers  buy. 

Mr.  Lord :  What  do  you  charge  for  the  making  of  those  lists  of 
stockholders  ? 

Mr.  Spaulding:     I  think  it  is  75  cents  per  hundred  names. 

Mr.  Lord :     What  do  you  charge  for  certified  copies  ? 

Mr.  Spaulding:     Twenty  cents  per  folio. 

Mr.  Lord:     Uncertified  copies? 

Mr.  Spaulding:     Ten  cents  per  folio. 

Mr.  Lord :  How  many  articles  of  association  were  received,  approxi- 
mately, last  year  for  record  and  filing? 

Mr.  Spaulding:  I  couldn't  tell  you  that.  But,  from  the  first  of  Jan- 
uary, 1917,  to  the  first  of  October,  1917,  there  were  1,340  new 
domestic  corporations  of  which  articles  were  recorded  here,  and 
124  foreign;  also  450  increases  of  capital  stock. 

Mr.  Lord:  It  is  safe  to  say  that  original  articles  filed  and  recorded 
will  amount  to  2,500  during  this  year? 

Mr.  Spaulding:     Well,  this  year  will  probably  be  a  little  sub-normal. 


78 

For  the  corresponding  period  in  1916  the  franchise  fees  amounted 
to  $113,000  approximately,  as  against  $160,000  approximately,  this 
year,  and  I  think  the  last  three  months  will  show  a  decline. 

Mr.  Lord:     You  probably  will  get,  during  the  year,  f  175,000? 

Mr.  Spaulding:  That  will  be  a  conservative  amount;  of  course,  that 
is  just  franchise  fees. 

Mr.  Lord :  Do  you  make  abstracts  of  the  reports  of  the  corporations 
for  the  commercial  agencies,  Dun  and  Bradstreet? 

Mr.  Spaulding:  Yes,  for  one  of  them,  either  Dun  or  Bradstreet.  Our 
reports,  I  think,  not  the  articles,  as  they  come  in  are  abstracted 
and  they  do  not  get  all  the  reports;  they  are  not  abstracted  unless 
on  special  demand. 

Mr.  Lord :     What  do  you  charge  for  abstracts  ? 

Mr.  Spaulding:  Twenty-five  cents  for  abstracting  reports,  10  cents  for 
articles  and  5  cents  for  amendments. 

Mr.  Lord :  What  proportion  of  your  articles  of  association  are  returned 
for  correction? 

Mr.  Spaulding:     I  should  say  that  about  40  per  cent  were  returned. 

Mr.  Lord :  What  proportion  of  the  articles  of  association  that  come 
in  are  recorded  and  what  proportion  are  filed  ? 

Mr.  Spaulding:  There  are  very  few  filed  and  not  recorded.  Of  course, 
the  articles  of  banks  are  filed,  after  having  been  examined  by  the 
Banking  Commission ;  articles  of  co-operative  associations  under 
the  1913  act  are  filed,  and  railroad  articles  and  one  or  two  others 
under  special  acts,  but  ninety-five  per  cent  are  recorded. 

Mr.  Thompson:  Can  you  think  of  anything  that  could  be  done  to  im- 
prove the  efficiency  of  your  department? 

Mr.  Spaulding :  I  don't  think  I  should  like  to  answer  that  off-hand.  If 
you  really  want  some  suggestions,  I  should  like  to  think  it  over  and 
put  it  in  writing. 

Mr.  Lord :  Do  you  know  of  any  labor  saving  equipment  that  you  could 
get  that  would  be  a  help  to  you  ? 

Mr.  Spaulding:  No,  I  don't.  "I  think  the  greatest  help  of  all  would  be 
to  revise  the  corporation  laws.  We  have  something  like  four  hun- 
dred and  sixty-seven  acts  under  which  companies  may  incorporate, 
all  more  or  less  over-lapping.  There  is  some  equipment  that  we 
could  use ;  for  instance,  fire  proof  filing  cases.  All  the  cards  of  our 
whole  index  system  for  corporations  of  this  state  are  in  that  wooden 
case ;  no  fire  protection  at  all. 

Mr.  Lord:  Have  you  ever  made  any  effort  through  the  Board  of 
Auditors  to  remedy  that  condition,  to  get  steel  boxes  ? 

Mr.  Spaulding:     No,  I  have  not.     I  suppose  it  has  been  made. 

Mr.  Lord:  If  those  files  should  be  destroyed  by  fire,  what  would  the 
result  of  the  loss  be? 

Mr.  Spaulding :  Well,  I  suppose  six  months  of  confusion,  of  direct  con- 
fusion, and  six  months  of  pretty  hard  work  on  the  part  of  all  the 
force  in  the  office ;  and  it  would  cost  considerable  money. 

Mr.  Lord:  Probably  fifty  times  the  cost  of  an  up-to-date  steel  filing 
case? 

In  the  recording  of  the  articles  of  association,  do  you  use  the  book 
typewriter  or  is  it  done  with  the  pen  ? 

Mr.  Spaulding :     Loose  leaf  system  with  typewriter.     It  also  falls  on 


79 

this  division,  don't  know  just  why,  to  take  care  of  the  railroad 
equipment  and  leases  which  are  required  to  be  recorded  here;  they 
had  always  been  recorded  in  long  hand  until  two  months  ago  I  got 
some  new  books  and  they  are  doing  that  with  the  typewriter  now. 
I  wish  we  could  get  things  organized  so  that  we  could  have  a  greater 
degree  of  efficiency;  for  instance,  I  would  like  to  publish  a  boot  of 
lists  of  corporations  and  amount  of  franchise  taxes  paid,  as  well  as 
a  directory;  a  book  of  statistics  for  which  we  have  a  great  demand. 

Mr.  Thompson:  What  value  would  that  be  to  the  residents  of  the 
state? 

Mr.  Spaulding:  I  can  judge  its  value  only  by  the  volume  of  demands 
we  have  for  it.  Don't  you  think  that  just  a  simplified  list  of  the 
corporations  would  be  valuable,  and  it  would  not  cost  very  much? 
We  very  often  have  demands  for  selective  lists. 

Deputy  Secretary  of  State:    George  L.  Lusk. 

Mr.  Lord:  How  often  does  your  man  in  Detroit  transmit  the  money 
from  that  office  to  you? 

Mr.  Lusk:     Every  day. 

Mr.  Lord :     And  a  complete  report  ? 

Mr.  Lusk :  Every  day  the  Detroit  office  reports  to  us  with  the  money, 
and  we  make  all  our  files  here,  so  that  their  applications  are  sent 
to  us  agreeing  with  their  report,  and  the  cash  statement  also  agrees 
with  it. 

Mr.  Lord:     Where  is  the  Detroit  office? 

Mr.  Lusk :     200  Majestic  Building. 

Mr.  Thompson:  Do  you  think  of  any  appliances  that  should  be  added 
to  your  equipment? 

Mr.  Lusk :     No,  have  none  in  mind  now. 

Mr.  Lord:  I  notice  in  going  through  the  divisions  downstairs,  that  a 
great  deal  of  the  footing  is  done  by  head,  especially  in  the  Vital 
Statistics  Division.  Don't  you  think  you  could  put  in  two  or  three 
good  adding  machines  and  save  a  good  deal  of  clerical  help? 

Mr.  Lusk :     We  have  machines  to  do  the  footing. 

Mr.  Lord :  They  do  a  lot  with  their  heads,  we  found  while  going  through. 
It  seems  to  me  that  you  could  save  a  good  deal  by  spending  a  little 
money  now  for  two  or  three  adding  machines  in  the  department. 

Mr.  Thompson :  Another  machine  that  you  could  use  here,  I  believe, 
to  great  advantage,  would  be  a  machine  to  do  your  addressing. 

Mr.  Lusk :     We  do  most  of  it  now  by  typewriters. 

Mr.  Lord:  With  an  addressing  machine,  one  operator  could  address 
6,000  a  day. 

Mr.  Thompson :  We  found  one  clerk  spending  his  entire  time  addressing 
envelopes  by  hand  and  during  the  last  of  the  month  he  stated  he 
would  have  to  have  help  of  two  other .  clerks.  Also  a  counting 
machine  was  mentioned  for  the  Vital  Statistics  Division. 

Mr.  Lord:  The  adding  machines  and  addressing  machine  are  very  im- 
portant; it  would  cost  a  little  money,  but  would  pay  for  itself  the 
first  year  and  you  would  still  have  them. 

We  also  took  up  with  Mr.  Spaulding  the  matter  of  keeping  the  files 
or  indexes  of  corporations  in  wooden  files;  don't  you  think  the 
department  ought  to  get  a  steel  file  for  those  things?  If  a  fire 
should  destroy  the  indexes,  it  would  take  the  entire  force  six  months 
tn  TAiYlflpA  it  flnrl  that,  wnnlrl  hft 


80 

Mr.  Lusk :  It  hadn't  occurred  to  me  as  to  the  danger.  We  put  in  new 
cases  there  within  the  last  year,  but  didn't  think  it  was  necessary  to 
put  in  a  steel  case.  I  presume  it  would  be  wise. 

Mr.  Lord:  Now,  getting  back  to  your  clerks.  How  many  clerks  are 
there  in  the  department  now  that  were  here  when  Mr.  Vaughan  was 
elected  Secretary  of  State;  what  per  cent  did  he  let  out  when  he 
became  Secretary  of  State,  or  since  he  took  office? 

Mr.  Lusk :     Not  over  a  dozen. 

Mr.  Lord :  So  that  eighty-five  per  cent  of  the  force  is  the  same  as  it 
was.  What  are  the  required  qualifications  for  a  clerkship  in  the 
department  ? 

Mr.  Lusk :  It  depends  something  on  the  work.  In  corporation  work 
we  would  expect  the  clerk  to  have  more  knowledge  than  a  clerk  on 
some  of  the  Vital  Statistics'  work.  There  is  no  special  standard. 
Mr.  Vaughan,  if  we  need  a  clerk  in  some  division,  sizes  up  the  appli- 
cant as  to  knowledge,  schooling,  etc.,  before  appointment  is  made. 

Mr.  Lord:  So  that  ability  is  really  the  test  rather  than  political  influ- 
ence in  the  appointment  of  your  clerks  ? 

Mr.  Lusk:  Yes,  sir:  I  may  say  with  safety  that  without  exception  all 
the  appointments  made  have  measured  up  reasonable  service.  Clerks 
have  to  do  their  duty  or  we  don't  want  them. 

Automobile  Division:    Mr.  Sternberg,  Chief. 

Mr.  Lord:     You  are  chief  of  the  Automobile  Division,  Mr.  Sternberg? 

Mr.  Sternberg:     Yes,  sir. 

Mr.  Lord:  Will  yoii  state,  in  a  general  way,  what  the  nature  of  the 
work  in  your  division  is  and  what  your  duties  are? 

Mr.  Sternberg:  My  duty  is  to  send  out  the  license  numbers  and  the 
cards  and  plates  to  those  who  apply  for  an  automobile  or  other 
license.  The  application  for  the  licenses  come  to  us  from  upstairs 
after  they  have  been  entered  on  the  cash  book. 

Mr.  Lord:     Do  you  assign  the  number  yourself? 

Mr.  Sternberg:  One  of  the  clerks  does  the  stamping;  he  stamps  them 
in  order  when  they  come  down. 

Mr.  Lord:  What  accounts  do  you  keep  here  of  the  number  of  licenses 
you  issue? 

Mr.  Sternberg:  WTe  keep  a  record  of  all  the  applications  which  we 
receive  here. 

Mr.  Lord  :     You  keep  a  record  of  all  the  licenses  you  send  out  ? 

Mr.  Sternberg:     Yes,  sir. 

Mr.  Lord :  How  many  licenses  did  you  send  out  last  year,  do  you  know 
approximately  ? 

Mr.  Sternberg:  This  year,  up  to  date,  or  rather  to  the  first  of  Novem- 
ber, this  office  and  the  Detroit  office  has  issued  225,032  licenses,  of 
which  this  office  issued  157,508  and  the  branch  office  issued  67,524. 

Mr.  Lord:  Does  the  branch  office  in  Detroit  keep  separate  accounts  or 
do  you  keep  them? 

Mr.  Sternberg:  They  make  a  separate  report  down  there  and  we  have 
a  copy  here  also. 

Mr.  Lord :     Do  you  make  any  report  of  that  when  it  comes  in  here? 

Mr.  Sternberg :     Yes,  sir ;  we  file  it. 


81 


Mr.  Lord :     That  office  is  not  under  your  charge,  is  it  ? 
Mr.  Sternberg:     No,  sir. 

Agricultural  Division:    Mr.  Chambers,  Chief. 


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Lord :     Will  you  state,  Mr.  Chambers,  in  a  general  way,  what  the 
work  of  this  division  is  and  what  your  duties  are  ? 
Chambers:     Well,  we  have  from  one  thousand  to  twelve  hundred 
crop  correspondents  and  six  hundred  fruit  correspondents,  to  whom 
we  send  blanks.     These  blanks  have  questions  asking  for  information 
relative  to   condition  of  crops,   relative   to   acres   that  have  been 
planted,  etc.,  then  those  blanks  are  returned  to  us  and  we  compile 
that  information  and  it  is  printed  monthly  in  our  crop  reports,  and 
distributed  to  the  newspapers  in  the  state,  and  also  we  send  copies 
to  each  of  our  crop  and  fruit  correspondents  and  to  any  other  per- 
sons asking  for  them.     Now,  then,  in  addition  to  that  we  compile 
the  annual  report  of  the  Superintendents  of  the  Poor,  annual  reports 
of  the  Sheriffs,  relative  to  the  deaf  and  dumb,  blind,  idiotic  and  epi- 
leptic.    These  are  published  in  pamphlet  form.     We  also  this  year, 
for  the  first  time,  published  a  list  of  threshers ;  anybody  engaged  in 
that  business  has  to  make  an  application  to  the  Secretary  of  State 
for  a  license;  we  have  about  2,700  licenses  out.    They  pay  no  fee; 
all  we  ask  in  lieu  of  fee  for  license  is  that  they  report  to  us  weekly 
the  number  of  acres  and  numbers  of  bushels  threshed  from  wheat 
down  to  beans,  and  we  publish  that  in  our  monthly  report. 
Lord :     How  many  crop  reports  do  you  mail  out  every  month  ? 
Chambers:     We  send  out  about  3,000  a  month. 
Lord:     How  are  the  envelopes  addressed? 
Chambers:     All  by  hand. 

Lord :     What  other  documents  do  you  mail  from  this  division  ? 
Chambers :     Well,  we  address  the  envelopes,  but  the  mailing  is  done 
by  the  shipping  clerks. 

Lord:     How  many  envelopes?     Give  us  the  approximate  number 
you  address  in  a  year. 
Chambers :     I  should  say  25,000. 

Lord:     Are  those  envelopes  addressed  usually  to  the  same  parties? 
Chambers :     Well,  some  of  them  are. 

Lord :     I  mean  the  larger  bulk  are  addressed  to  the  same  parties  ? 
Chambers:     Mostly  the  same  parties. 
Thompson:     How  often  do  you  revise  your  list? 
Chambers :     About  every  five  years.    We  do  it  in  this  way.    We  send 
it  as  first  class  mail  about  once  in  five  years ;  we  have  pretty  close  to 
3,000  names  all  told. 

Thompson:     Mailing  to  3,000  people  twelve  times  a  year.     Who 
does  that  addressing?    How  many  clerks  does  it  take  to  do  that? 
Chambers:     It  would  keep  one  clerk  pretty  busy. 
Thompson :     How  many  envelopes  can  a  clerk  address  in  a  day? 
Chambers :     I  don't  know.    We  had  a  lady  that  would  do  500  a  day 
and  do  it  easy.     I  think  I  could  address  500.     Now,  in  addition  to 
what  I  have  already  told  you,  as  chief  of  this  division,  I  am  Librarian 
of  the  Horticultural  Society;  they  issue  from  five  to  six  thousand 
copies  of  the  Horticultural  reports  every  year.     They  are  shipped 


from  here.  We  attend  to  the  addressing,  but  the  shipping  room  ships 
them.  So,  as  a  matter  of  fact,  it  would  probably  be  about  30,000 
envelopes  a  year  that  we  address. 

Building  and  Loan  Division :    George  H.  Marshall,  Chief. 

Mr.  Lord:  Mr.  Marshall,  you  are  the  chief  of  the  Building  and  Loan 
Division  ? 

Mr.  Marshall:     Yes,  sir. 

Mr.  Lord :  Will  you  state  in  a  general  way  what  the  work  of  this  divi- 
sion consists  of  and  what  your  duties  are? 

Mr.  Marshall :  My  duties  are  examining  the  Building  and  Loan  Asso- 
ciations; going  out  and  going  through  their  offices,  counting  their 
money  to  see  that  it  agrees;  and  when  I  am  in  the  office  here  from 
June  30th,  I  am  checking  up  their  reports  which  come  in  after  that 
date,  seeing  that  they  are  right  and  also  comparing  them  with  the 
previous  reports  to  see  that  they  work  out  all  right ;  then  I  also  pub- 
lish an  annual  report. 

Mr.  Lord:  What  is  your  method  of  examination  when  you  go  to  these 
various  associations? 

Mr.  Marshall :  Well,  usually  I  go  in  and  count  their  cash,  then  I  check 
their  individual  ledger  and  compare  with  the  general  ledger,  go 
through  their  mortgage  loans  and  check  them  with  the  loan  register, 
and  also  look  to  see  if  they  are  properly  recorded  with  the  Register  of 
Deeds,  see  if  acknowledgements  are  properly  taken,  see  if  insurance  is 
in  force,  and  see  that  the  mortgage  clause  is  in  the  policy. 

Mr.  Lord :  In  making  the  examination,  you  say  you  examine  the  mort- 
gages; now,  what  examination  of  the  property  covered  by  the  mort- 
gages do  you  make,  to  know  that  the  security  is  ample? 

Mr.  Marshall :  In  some  cases  I  have  made  examination  of  the  property, 
but  I  usually  look  at  the  application  for  the  loan. 

Mr.  Lord:  Do  you  ever  make  any  attempt  to  ascertain  whether  two  or 
three  mortgages  cover  the  same  property? 

Mr.  Marshall:     Yes,  and  find  many  of  these  cases. 

Mr.  Lord :  What  steps  do  you  take  to  see  that  these  associations  comply 
strictly  with  the  law  under  which  they  are  organized?  For  instance, 
suppose  a  Building  and  Loan  Association  was  doing  a  sort  of  banking 
business  instead  of  a  building  and  loan  business? 

Mr.  Marshall:  I  should  call  attention  to  the  fact  to  the  Secretary  and 
Directors. 

Supplementary  to  the  above  information  the  Secretary  of  State  sub- 
mitted the  following  general  statement  relative  to  the  activities  of  his 
department : 

"The  Secretary  of  State  is  charged  by  constitutional  and  statutory 
provisions  with  many  diverse  duties.  During  a  vacancy  in  the  office  of 
Governor,  if  the  Lieutenant  Governor  is  incapable  of  performing  the 
duties  of  his  office  or  is  absent  from  the  state,  the  Secretary  of  State  shall 
act  as  Governor  until  the  vacancy  be  filled  or  the  disability  cease. 

"In  general,  it  may  be  said  that  he  is  the  keeper  of  the  great  seal,  and 
of  the  records  and  archives  of  the  state  government ;  that  he  has  charg( 
of  the  compilation,  publication  and  distribution  of  the  laws,  documents 
and  reports  of  the  various  departments,  institutions,  officers,  and  boards ; 


83 

that  he  issues  commissions,  warrants,  patents  and  requisitions  for  extra- 
dition upon  the  order  of  the  Governor ;  that  he  gives  notice  of  the  holding 
of  elections  and  receives  and  files  returns  thereof;  that  he  has  general 
supervision  of  corporations  in  the  matter  of  filing  and  recording  articles 
of  association  and  of  filing  the  reports  of  such  corporations ;  that  hejias 
charge  of  the  collection,  compilation  and  publication  of  statistics  upon 
various  subjects;  that  he  is  state  registrar  of  motor  vehicles  and  chauf- 
feurs; that  he  approves  and  records  bonds  required  to  be  furnished  by 
those  engaged  in  selling  steamship  or  railroad  tickets  or  orders  for  trans- 
portation to  and  from  foreign  counties,  and  the  receipt  of  deposits  of 
money  for  transmission  to  foreign  countries,  and  'issue  certificates  of 
authority  to  transact  such  business.  He  is  a  member  of  the  Board  of 
State  Auditors,  Board  of  State  Canvassers,  Board  of  Escheats,  Board  of 
Fund  Commissioners,  Board  of  Control  of  State  Swamp  Lands,  Board  of 
Internal  Improvement,  State  Board  of  Equalization  and  Public  Domain 
Commission. 

The  Deputy  Secretary  of  State  has  immediate  charge  of  the  work  of 
the  office,  and  is  the  acting  head  of  the  department  in  the  absence  of  the 
Secretary  of  State.  The  official  staff  of  the  department  consists  of— 

Secretary  of  State — Coleman  C.  Vaughan. 

Deputy  Secretary  of  State — George  L.  Lusk. 

Chief  Clerk— Albert  Dunham. 
The  department  is  composed  of  eight  divisions  as  follows : 

Executive — Albert  Dunham,  Chief  Clerk. 

Corporation — Oliver  Spaulding,  Chief. 

Building  and  Loan — George  H.  Marshall,  Examiner. 

Vital  Statistics— William  F.  Petrie,  Chief. 

Compilation — H.  L.  Havens,  Chief. 

Motor  Vehicle— C.  S.  Sternberg,  Chief. 

Branch,  Motor  Vehicle — E.  L.  Dooling,  Mgr.  (Detroit). 

Agricultural — Hiram  Chambers,  Chief. 

Shipping — W.  L.  Brush,  Chief. 

SYNOPSIS  OF  WORK  OF  VARIOUS  DIVISIONS. 

Executive  Division. 

Issuing  Notary  Public  commissions,  warrants  of  requisitions  from  Gov- 
ernors of  other  states,  parole  and  pardons,  commutation  of  sentences, 
commissions  to  Governor's  appointees,  certificates  to  public  accountants 
and  steamship  brokers. 

Filing  all  bonds  not  otherwise  designated,  oaths  of  office,  paroles  and 
pardons,  commutation  of  sentences,  Sheriff's  returns,  record  of  township 
and  city  officers,  Justices  of  the  Peace,  file  of  Notaries  Public  and  Com- 
missioners of  Deeds,  issuing  and  recording  land  patents,  recording  and 
filing  deeds  to  state. 

The  administration  of  the  Great  Seal  of  the  state. 

The  documentary  transactions  in  this  division  number  about  5,000 
annually;  the  correspondence  covers  a  wide  range. 

Division  of  Corporations. 

All  corporations  desiring  to  incorporate  must  file  or  record  their 
articles  in  this  division.  Amendments  and  changes  of  attitude  must  be 


84 

recorded  here.  Annual  reports  of  all  corporations  are  here  received, 
examined,  and  when  in  proper  form  approved.  Aside  from  the  regular 
corporations,  special  statutes  apply  to  mercantile  and  manufacturing 
companies,  street  railway  companies,  religious  societies,  social  clubs  not 
organized  for  profits,  and  other  miscellaneous  companies.  Banks  and 
trust  companies  file  articles  here  after  being  approved  by  the  Banking 
Commissioner,  and  certain  classes  of  insurance  companies  list  their 
stockholders  with  this  division.  Foreign  corporations  desiring  to  do 
business  in  Michigan  must  file  articles  here  and  duplicates  of  annual 
reports.  Trade-marks  and  trade-names  are  registered  in  this  division. 
The  correspondence  is  voluminous.  There  are  upwards  of  3,000  new  cor- 
porations formed  each  year  and  16,000  now  operating  in  this  state;  the 
collection  of  franchise  fees  for  the  last  fiscal  year  amounted  .to 
1202,629.70;  recording  fees,  commercial  reports,  certified  copies,  etc., 
amount  to  $24,685.73. 

Vital  Statistics  Division. 

This  division  deals  with  record  of  births,  deaths,  marriages,  and 
divorces.  For  the  fiscal  year  of  1916  the  record  was  as  follows :  Births, 
87,059;  deaths,  45,106;  marriages,  38,890;  divorces,  5,253.  The  division 
furnished  the  U.  S.  Government  birth  and  death  transcripts  for  the  past 
year  to  the  value  of  $4,362.88. 

The  system  of  filing,  recording,  indexing,  etc.,  embraces  a  vast  amount 
of  detail  labor.  Every  registrar  (township,  village  or  city  clerk  or  health 
officer — 1,700),  reports  monthly.  An  account  with  5,000  physicians  and 
mid-wives  is  kept.  War  conditions  accentuate  the  value  of  vital  sta- 
tistics. This  division  publishes  a  monthly  bulletin  and  compiles  a  record 
annually  of  vital  statistics. 

Motor  Vehicle  Division. 

In  this  division  figures  speak  for  themselves.  The  calendar  year  1917 
in  motor  vehicle  registrations  will  far  excel  any  previous  year.  Esti- 
mates of  registrations  and  receipts  are  as  follows: 

Motor  vehicle  registrations 250,000 

Motor  Cycle  registrations 10,000 

Chauffeur  registrations 18,000 

Manufacturers  and  dealers 900 

Total  tax  estimated $2,600,000 

1909,  the  first  year  when  cars  were  registered,  the  total  amounted  to 
11,718  cars.  The  law  provides  that  one-half  the  regular  tax  received 
from  this  source  goes  back  to  the  county  of  origin,  which  necessitates 
keeping  distinct  account  with  each  county.  The  tax  being  computed  on 
the  basis  of  horse  power  and  weight,  greatly  complicates  the  work  of 
handling  the  business  of  this  division  and  entails  a  heavy  correspondence. 

Division  of  Compilation. 

In  this  division  are  compiled  the  Michigan  Manual,  the  public  acts, 
pamphlet  editions  of  various  laws,  the  receipt  and  compilation  of  election 
returns,  motor  vehicle  lists,  etc. 


85 

Building  and  Loan  Division.    • 

The  supervision,  examination  and  annual  reports  of  all  building  and 
loan  associations  are  taken  care  of  in  this  division.  The  power  to  termi- 
nate the  existence  of  such  associations  rests  with  the  Secretary  of  State. 
There  are  seventy  (70)  in  number,  with  a  total  membership  of  63,769 
persons,  and  total  assets  of  f 31,379,472. 18. 

Agricultural  Division. 

This  division  collects  and  compiles  statistics  relative  to  crop  reports 
from  1,200  correspondents,  and  issues  a  monthly  bulletin  of  same.  Reports 
of  flouring  mills,  elevators  and  grain  dealers  are  also  received  here,  while 
all  threshermen  are  obligated  to  report  their  work  during  the  threshing 
season. 

In  addition  to  the  annual  reports  of  Superintendents  of  the  Poor  and 
Sheriffs,  there  are  compiled  statistics  relative  to  the  insane,  blind,  idiotic 
and  epileptics. 

Shipping  and  Supplies. 

The  Shipping  Division  takes  care  of  all  supplies  and  documents,  super- 
vises all  shipments,  and  keeps  the  necessary  records  in  connection  there- 
with." 

TREASURER'S  OFFICE 

Mr.  Lord:     Mr.  Gorman,  you  are  the  Deputy  State  Treasurer? 

Mr.  Gorman:     Yes,  sir. 

Mr.  Lord:  Will  you  please  state,  briefly  of  course,  what  the  duties  of 
this  department  consist  of;  what  are  its  activities,  etc.? 

Mr.  Gorman :  The  department  receives  and  is  custodian  of  all  the  funds 
belonging  to  the  state  of  Michigan.  The  funds  are  received  from  the 
various  sources  and  placed  out  in  depositories  about  the  state,  some 
three  hundred  depositories.  We  make  all  disbursements  for  state 
accounts,  issuing  checks  for  all  bills  and  vouchers  against  the  state, 
all  on  warrant  of  the  Auditor  General.  The  department  acts  as  a 
bank  for  the  various  other  departments,  Secretary  of  State,  Auditor 
General,  Public  Domain,  Insurance  Department,  etc. 

Mr.  Lord :  That  is,  these  departments  deposit  with  you  all  the  fees  they 
collect? 

Mr.  Gorman  :  Yes ;  and  then  in  addition  to  this  the  department  has  the 
custody  of  some  ten  million  dollars  worth  of  securities,  by  provision 
of  law. 

Mr.  Lord:     What  bonds  do  you  require  from  your  depositories? 

Mr.  Gorman:  Our  depositories  are  required  to  furnish  the  bond  of 
some  satisfactory  surety  company  for  the  full  amount  of  the  deposit. 
In  lieu  of  that,  they  are  permitted  to  deposit  collateral,  such  as 
municipal  bonds,  railroad  bonds,  etc.  United  States  Government 
bonds  are  accepted  at  par  value;  Michigan  municipal  bonds  at  90% 
of  market  value;  industrial  bonds  at  75%  of  market  value. 

Mr.  Lord :     Do  you  have  very  many  industrial  bonds  ? 

Mr.  Gorman:     Well,  about  $1,000,000.00,  I  judge. 

Mr.  Lord :  Have  those  industrial  bonds  depreciated  to  any  extent  since 
the  war  started? 


86 

i 

Mr.  Gorman:    Very  slightly,  perhaps. 
Mr.  Lord :     Where  there  is  any  depreciation,  to  any  extent,  do  you  call 

for  additional  collateral? 
Mr.  Gorman :     Yes,  sir. 

Mr.  Lord:     Mr.  Gorman,  a  number  of  the  boards  and  commissions  con- 
nected with  the  state  government  collect  a  large  amount  of  fees. 

Will  you  tell  us  to  what  fund  these  fees  are  credited  by  the  State 

Treasurer  ? 

Mr.  Gorman:     I  don't  just  get  the  point. 
Mr.  Lord :     For  instance,  the  Game  Warden's  Department  collects  license 

fees;  to  what  particular  fund  are  those  fees  credited? 
Mr.  Gorman:     Well,    the   Game   Warden's    Department    is   a    peculiar 

department.     There  are  a  number  of  provisions  of  the  law  governing, 

and  there  are  perhaps  six,  eight  or  ten  accounts  that  these  various 

fees   are   credited   to.      For   instance.    Game    Protection,    Angler's 

License  Fund,  Hunters'  License,  etc. ;  part  of  these  accounts  are 

credited  with  fees  from  one  source  and  some  from  other  sources; 

there  are  eight  or  ten  state  accounts  with  this  department,  all  under 

the  general  fund. 

Mr.  Lord:     How  many  accounts  have  you  under  the  General  Fund? 
Mr.  Gorman :     About  three  or  four  hundred.       These  fees,   when   we 

receive  them,  become  a  part  of  the  general  fund;  credited  to  the 

general  fund  under  the  different  heads  of  the  fund. 
Mr.  Lord:     These    moneys    are    for    exclusive    use    of    that    particular 

department? 
Mr.  Gorman  :     Yes,  sir. 
Mr.  Lord:     Is  there  any  limitation  to  the  amount   of  such  funds  the 

departments  can  draw? 
Mr.  Gorman:     No  limitation  whatever. 
Mr.  Lord:     So  that  it  amounts  really  to  a  "grab  bag"? 
Mr.  Gorman:     Yes. 
Mr.  Lord:     Can  you  tell  us  off-hand  whether  those  fees  are  all  drawn 

each  year? 

Mr.  Gorman:     I  can't  tell  you  off-hand.     I  believe  they  are. 
Mr.  Lord:     Tell  us  whether  or  not  the  Game  Warden's  Department,  or 

any  of  the  departments,  ever  draw  on  the  general  fund  proper  for 

any  additional  funds. 
Mr.  Gorman:     I  think  they  do.     In  a  number  of  cases  the  law  permits 

them  to. 
Mr.  Lord:     So  that  they  can  also  draw  on  the  general  fund  proper  for 

additional  money? 

Mr.  Gorman:     Yes,  sir.     In  other  words,  they  are  not  self-supporting. 
Mr.  Lord :     These  several  sub-classes  you  carry  for  the  Game  Warden's 

Department;  are  these  covered  by  separate  accounts  for  each  of 

these  divisions? 
Mr.  Gorman :     Yes,  sir. 
Mr.  Lord:     Does  the  same  condition  of  affairs  exist  with  any  other 

department  ? 
Mr.  Gorman:     No,  I  don't  think  of  any  other  department.     In  most  of 

the  other  departments,  their  fees  are  totaled  as  a  whole;  they  turn 

in  their  fees  once  a  month  and  they  are  credited  to  their  account; 

and  from  time  to  time,  as  they  incur  expense,  vouchers  are  made  out 


87 

and  go  to  the  Auditor  General.  Then  they  are  referred  to  us  for 
payment. 

The  Board  of  Registration  in  Medicine,  I  believe,  turns  in  their  bal- 
ance after  paying  their  expenses.  A  number  of  boards  and  com- 
missions used  to  do  the  same  thing  but,  under  the  act  of  last  year, 
all  fees  have  to  be  turned  in  to  the  Treasurer's  office. 

Mr.  Lord :  They  have  to  turn  these  fees  in  now  to  the  State  Treasurer, 
but  they  are  credited  to  the  particular  department  or  commission 
turning  them  in?  Can  you  name  the  number  of  these  boards  that 
are  governed  in  this  way  ? 

Mr.  Gorman:     Board  of  Registration  in  Medicine; 
Board  of  Examiners  in  Optometry ; 
Board  of  Registration  of  Architects ; 
Board  of  Examiners  of  Barbers ; 
State  Veterinary  Board ; 
Michigan  Non-Game  License  Commission; 
State  Oil  Inspector; 

Board  of  Osteopathic  Registration  and  Examination. 
I  believe  that  is  all. 

Mr.  Lord :     How  about  the  Dairy  and  Food  Department  ? 

Mr.  Gorman:  The  Dairy  and  Food  Department  and  State  Board  of 
Health,  and  the  Michigan  Securities  Commission,  turn  in  their  fees 
and  those  fees  are  credited  for  their  particular  use,  but  they  are 
not  limited  to  the  amount  of  their  fees;  they  can  draw  from  the 
general  fund.  The  Dairy  and  Food  Commissioner,  for  instance, 
uses  the  fees  for  certain  purposes,  and  in  addition  to  that,  he  has  a 
direct  appropriation. 

Mr.  Lord:  How  many  of  these  commissions  and  boards  do  draw  upon 
the  general  fund,  in  addition  to  fees  they  collect  ? 

Mr.  Gorman :  I  couldn't  answer  that  off-hand.  I  don't  think  there  are 
very  many  of  them.  I  think  in  most  cases  the  fees  exceed  the  amount 
of  their  expenditures/ 

Mr.  Lord :  Give  us  your  opinion  of  the  present  system  of  collecting 
fees  and  their  use. 

Mr.  Gorman:  Well,  personally,  I  can't  see  the  wisdom  of  the  present 
system.  I  believe  that  every  department  ought  to  have  a  reasonable 
specified  amount  of  money  appropriated  to  transact  their  business 
on. 

Mr.  Lord:  Your  remedy  would  be  that  these  fees,  when  collected,  be 
turned  over  and  credited  to  the  general  fund  of  the  state  and  that 
each  of  these  commissions,  or  boards,  making  collections  of  these 
fees,  should  go  to  the  legislature  for  a  direct  appropriation  for  their 
support,  and  that  they  be  kept  within  their  appropriation  without 
drawing  upon  the  general  fund.  Would  that  facilitate  the  work  of 
the  treasury  department  to  any  great  extent? 

Mr.  Gorman:  It  would  simplify  the  accounts.  It  surely  would  facili- 
tate the  work  to  a  certain  extent.  We  would  have  a  more  uniform 
system  of  handling  all  accounts.  That  is  one  of  the  great  difficul- 
ties now ;  there  are  no  two  departments  handled  in  the  same  manner. 

Mr.  Lord :  Now,  then,  Mr.  Gorman,  have  you  had  any  trouble  whatever 
with  any  of  the  departments  or  boards  so  far  as  their  system  of 
keeping  accounts  is  concerned  ? 


88 

Mr.  Gorman:  We  naturally  would  not,  because  it  is  all  done  at  the 
Auditor  General's  Department. 

Mr.  Lord:  Do  you  know  anything  about  the  system  of  accounts  kept 
by  the  boards,  etc.  ? 

Mr.  Gorman:  No,  I  am  not  personally  familiar  with  it.  It  always 
seemed  to  me,  that,  for  instance,  our  department  collects  the  state 
tax.  We  might  take  credit  for  those  taxes  and  use  the  money  to 
run  our  department ;  it  is  the  same  proposition  with  boards  and  com- 
missions. No  matter  what  money  they  collect  it  belongs  to  the 
state. 

Mr.  Gorman:  Another  little  matter  that  has  always  been  a  question 
with  this  department,  the  matter  of  various  institutions  or  boards 
working  under  appropriation ;  they  have  considerable  money  on  hand 
at  all  times  earning  interest.  We  have  always  contended  that  no 
institution  nor  board  had  the  right  to  do  that ;  and  that  the  money 
should  always  be  under  control  of  the  State  Treasury  and  the 
interest  it  earns  go  into  the  State  Treasury. 

Mr.  Thompson :  Would  it  be  feasible  for  the  State  of  Michigan  to  have 
a  central  treasury? 

Mr.  Gorman:     This  department  has  always  contended  that  it  would. 

Mr.  Thompson:  Could  you  devise  such  a  system,  a  system  where  the 
vouchers  would  be  drawn  by  the  institutions  and  checks  cashed 
through  this  office?  Would  it  be  safe  and  would  it  be  economical? 

Mr.  Gorman :  It  certainly  would  be  economical  and  I  think  it  would  be 
safe.  The  Military  Department  has  always  used  that  system  and  it 
has  always  been  satisfactory  with  +hem  and  with  us. 

Mr.  Lord:  Your  idea  is  that  all  this  money  should  be  deposited  with 
a  central  state  treasury  and  all  bills  paid  by  this  treasury ;  in  other 
words  to  make  matters  short,  it  would  dispense  entirely  with  all  the 
state  sub-treasuries  and  have  one  treasury  for  the  State  of  Michigan. 

Mr.  Gorman:  Yes,  sir.  Under  the  system  we  have  with  the  Military 
Department  when  their  funds  run  low,  they  make  a  request  and, 
instead  of  writing  a  check  and  sending  to  them,  we  simply  place  to 
their  credit  the  amount  they  ask  for,  and  they  check  on  us. 

Mr.  Lord :    Does  the  Auditor  General  make  an  audit  of  your  books  ? 

Mr.  Gorman:  Yes,  sir;  in  this  way:  Our  accounts  are  checked  every 
day,  receipts  and  disbursements,  and  at  the  end  of  the  month  the 
Auditor  General  and  Superintendent  of  Public  Instruction  count 
our  money;  that  is  our  cash  and  our  bank  balances.  We  furnish 
them  a  list  of  the  depositories  and  they  check  all  our  books. 

Mr.  Thompson:  Individual  checking  by  treasurer;  would  that  be  all 
right,  or  would  that  not  have  to  be  done  through  the  Auditor 
General  ? 

Mr.  Gorman :  They  would  get  their  warrant  there.  We  would  place  it 
to  their  credit  on  their  bank  account  and  they  would  check  against 
that.  Instead  of  us  sending  them  a  check,  we  would  honor  their 
checks  up  to  that  amount,  and,  when  that  was  exhausted,  they  would 
have  to  get  another  voucher  through. 

Mr.  Tompkins:  In  case  prisons  and  other  institutions  were  made  to 
deposit  the  moneys  belonging  to  inmates  here,  how  would  you  handle 
them? 

Mr.  Gorman:  That  could  be  handled  the  same  way  as  department 
accounts  now. 


89 

Mr.  Thompson :  Are  there  many  surety  companies  that  go  on  the  bonds 
which  you  accept? 

Mr.  Gorman:     Quite  a  good  many. 

Mr.  Thompson:  What  funds  have  you  in  the  custody  of  the  State 
Treasurer  ? 

Mr.  Gorman:     They  are  all  shown  in  our  report. 

Mr.  Lord:     Have  you  any  office  rules  governing  this  office? 

Mr.  Gorman:  No,  sir.  We  have  a  small  force  and  try  hard  to  keep 
away  from  rules  and  regulations. 

Mr.  Lord :     Are  there  certain  taxes  collected  by  this  department  ? 

Mr.  Gorman :     They  are  really  collected  by  the  Auditor  General. 

Mr.  Lord:     Are  there  any  collected  by  this  department? 

Mr.  Gorman:     Not  directly. 

Mr.  Lord :     Is  the  office  the  custodian  of  certain  securities  ? 

Mr.  Gorman:  We  have  about  ten  or  eleven  million  dollars  worth  of 
securities  placed  here  by  Trust  Companies.  I  happened  to  figure  up 
the  other  day  and  we  have  four  new  insurance  companies,  each  hav- 
ing |100,000  with  us,  and  three  new  Trust  Companies,  each  having 
1150,000  or  |20p,000  with  us. 

Mr.  Lord:  In  addition  to  that  don't  you  act  as  trustee  for  some  of  the 
corporations  that  have  been  licensed  to  sell  stock  in  Michigan  ? 

Mr.  Gorman:  In  a  good  many  cases.  The  Michigan  Securities  Com- 
mission requires  certain  securities  placed  in  escrow  with  us. 

Mr.  Lord :     How  much  of  that  have  you  ? 

Mr.  Gorman  :     Several  millions,  I  should  judge. 

Mr.  Lord :  In  making  appointments  to  your  office  force  here,  is  ability 
to  perform  their  duties  the  point  considered  ? 

Mr.  Gorman :  Absolutely.  There  never  has  been  an  appointment  made 
for  political  reasons  in  this  department,  to  my  knowledge. 

Mr.  Lord:  How  about  your  office  equipment  and  labor  saving  devices? 
Is  there  anything  that  you  could  use,  that  you  think  would  be  of  a 
benefit  to  you? 

Mr.  Gorman :     We  are  well  provided  for. 

Mr.  Hinkley:  Have  you  any  idea  how  much  extra  funds  it  would  give 
you  in  the  treasury  if  the  central  treasury  idea  was  adopted  and 
everybody  checked  directly  on  it? 

Mr.  Gorman :  Well,  I  can't  tell  off-hand ;  but  I  know  that  several  times 
when  the  state  was  hard  up,  twice  we  were  practically  "broke,"  and 
we  figured  up,  with  the  assistance  of  the  Auditor  General's  Depart- 
ment, that  on  each  of  those  occasions  there  was  more  than  f  500,000.00 
in  the  hands  of  state  institutions  that  we  could  not  touch.  Another 
thing;  last  winter  one  of  the  institutions  was  very  hard  up  and  the 
local  bank  carried  them  along  month  after  month  until  their  next 
appropriation  was  available;  the  bank  came  down  here  to  see  if 
there  was  not  some  way  we  could  help  them  out  and  we  found  that 
at  this  same  time  this  same  institution  had  on  deposit  with  another 
bank  the  proceeds  of  a  special  appropriation  amounting  to  $45,000. 
That  same  thing  prevails  with  the  state ;  the  state  may  be  "broke"  but 
institutions  may  have  a  half  million  dollars  to  their  credit  in  various 
banks. 

Mr.  Lord :  Can  you  tell  us  about  how  much  the  institutions  of  the  state 
have  on  hand,  on  an  average? 


90 

Mr.  Gorman :     I  couldn't  only  from  this  one  instance,  when  we  figured 

up  they  had  f  500,000  on  hand. 
Mr.  Lord:     That  was  the  time  I  refer  to;  and  the  state  had  to  borrow 

|250,000,  I  think.     Do  you  remember  the  interest  charges  on  that 

loan? 
Mr.  Gorman :     Three   per   cent.     The   interest   paid   on   the   loan   was 

11,284.24. 

The  number  of  checks  issued  by  this  department  has  increased  from 

about  five  thousand  per  annum  in  1906  to  more  than  one  hundred 

thousand  in  1917. 

SUPERINTENDENT  OF  PUBLIC  INSTRUCTION. 

Mr.  Lord:  Mr.  Keeler,  you  are  the  Superintendent  of  Public  In- 
struction ? 

Mr.  Keeler:     Yes,  siii. 

Mr.  Lord :  Will  you  state  to  us,  Mr.  Keeler,  the  activities  of  your  depart- 
ment, what  you  do,  what  you  have  done,  what  you  propose  to  do  in 
the  future  and  what  benefit  the  activities  of  your  department  are  to 
the  people  of  the  state? 

Mr.  Thompson  :  Just  give  us  a  general  statement  relative  to  your  depart- 
ment. 

Mr.  Keeler:  Necessarily,  the  backbone  of  the  educational  system  of 
Michigan  is  the  primary  school  fund,  which  this  year  amounted  to 
practically  six  and  one-half  million  dollars.  This  money  can  go  only 
to  teachers  and  for  the  payment  of  tuition  for  boys  and  girls  from 
the  country  districts  who  are  attending  high  school. 
Of  course,  I  have  general  supervision  of  the  public  school  system  of 
Michigan;  that's  my  job  and  I  have  tried  to  unify  the  public  school 
system  of  Michigan.  For  example,  I  think  it  is  up  to  this  depart- 
ment that  every  school  of  like  character  shall  have  practically  the 
same  course  of  study.  We  have  made  it  a  law  that  every  district 
school  follow  the  same  course  of  study.  This  department  makes  that 
course  of  study  and  they  must  use  it.  Heretofore  they  used  every- 
thing. 

Mr.  Lord:  Who  designated  the  course  of  study  before  the  law  was 
enacted  ? 

Mr.  Keeler:  Any  board  that  wanted  to;  every  school  board  could  make 
their  own  course  of  study  and  they  would  leave  it  to  the  teachers 
and  every  teacher  made  his  own.  That  is  a  very  important  thing 
because  we  have  several  thousands  of  districts.  Now,  I  haven't  any 
power  in  this  particular  point,  but  I  think  this  department  ought  to 
control  the  course  of  study  in  all  the  villages  and  cities  for  the  state 
of  Michigan.  You  take  Mason,  Leslie,  Owosso,  for  instance,  those 
places  and  similar  ones  change  Superintendents  every  two  or  three 
years;  they  get  young  fellows  and  about  the  first  thing  they  think 
they  ought  to  do  is  make  a  new  course  of  study,  and,  if  they  have 
specialized  in  some  line  of  study,  that  is  what  they  fill  their  courses 
up  with.  For  example,  if  they  have  made  a  specialty  of  language, 
they  load  it  up  with  that.  They  are  young  fellows  without  experi- 
ence; they  don't  see  it  from  every  angle.  I  am  going  to  ask  the  legis- 
lature this  coming  year  to  give  us  the  power  to  make  a  course  of 
study  for  all  villages  and  cities  in  the  state.  I  consult  the  University 


91 

of  Michigan  and  Normal  Schools  on  the  courses,  but  we  really  act  as 
last  word  on  it.  So  much  for  the  course  of  study. 

Mr.  Lord:  Would  there  not  be  some  danger  in  that  procedure  if  you 
should  happen  to  get  an  incompetent  Superintendent  of  Public 
Instruction  ? 

Mr.  Keeler :  I  do  not  think  there  is  as  much  danger  as  there  is  in  school 
boards  getting  the  incompetent  people  that  they  do  who  make  up  the 
course  of  study.  When  I  leave  this  office,  all  the  help  in  here  will 
not  go;  the  competent  help  will  remain. 

Mr.  Lord :  Yes ;  but  you  are  liable  to  get  a  cheap  politician  in  the  office 
and  if  you  had  a  law  of  that  kind  it  would  be  state-wide. 

Mr.  Keeler:  They  have  the  law  in  Indiana  and  they  got  just  such  a 
fellow  in  office  and  they  have  put  him  out. 

Now,  we  have  to  do  with  the  inspection  of  high  schools ;  the  university 
has,  of  course,  put  them  on  an  approval  list,  .but  there  has  been  a 
great  deal  of  criticism  of  the  university;  some  claim  they  sort  of 
approve  high  schools  by  locating  their  own  teachers  and  I  feel  we 
ought  to  have  something  to  do  with  the  approving  of  high  schools  in 
Michigan;  we  do  part  of  that  now. 

Mr..  Lord :     Is  that  statutory  authority  that  you  act  under? 

Mr.  Keeler :  Well,  no ;  but  we  are  in  a  pretty  agreeable  situation  with 
the  University  of  Michigan ;  they  asked  us  to  do  it,  and  I  imagine  we 
have  done  pretty  nearly  half  of  it  during  the  last  year. 
Then,  I  am  on  the  State  Board  of  Education;  we  have  four  state 
normal  schools  and  the  real  function  of  them  is  to  prepare  teachers 
for  the  State  of  Michigan.  I  am  the  active  member  on  this  board,  do 
all  the  secretarial  work,  we  keep  the  books  and  look  right  after  it. 
I  think  the  state  normal  schools  are  in  a  pretty  good  condition  and  I 
think  that  is  one  thing  you  might  enlarge  on  in  your  budget  report ; 
that  we  are  practically  the  only  board  that  has  charge  of  and  act  for 
all  the  institutions  of  a  similar  character ;  we  act  for  all  four  normal 
schools  and  I  believe  it  is  successful.  I  spend  one-quarter  of  my 
time  with  that  board  and  I  believe  my  time  is  pretty  well  spent, 
and  then  besides  that  we  have  a  county  normal  school  system ;  in 
Michigan  we  have  fifty  county  normals,  in  fifty  different  counties, 
whose  sole  purpose  is  to  prepare  teachers  for  country  boys  and  girls. 
We  graduate  nearly  a  thousand  every  year,  trained  teachers.  The 
state  pays  $1,200.00  to  every  one  of  the  county  normals  each  year 
and  the  county  and  town  where  it  is  located  pays  the  rest  of  the 
expense ;  for  example,  you  take  Sanilac  county,  we  have  two  teachers 
there  and  generally  graduate  about  twenty  every  year ;  we  will  sup- 
pose it  takes  $2,200.00  to  run  the  school,  the  state  pays  $1,200.00 
and  that  leaves  $1,000.00  to  be  divided  between  Croswell,  where  it  is 
located,  and  the  County  of  Sanilac.  In  that  county  the  supervisors 
are  so  interested  that  they  equipped  the  school  to  the  limit,  bought  a 
$300.00  piano  last  year,  books,  etc.  There  is  a  university  graduate  at 
the  head  of  the  school. 

Mr.  Lord:     Does  that  relieve  teachers  of  examinations? 

Mr.  Keeler :  Yes,  sir ;  we  give  teachers  a  certificate  for  three  years,  then 
we  renew  it,  after  six  weeks'  work,  and  sometimes  we  renew  it  again 
at  the  end  of  another  three  years. 


92 

Mr.  Thompson:  What  grade  of  certificate  is  it  that  you  issue  to  these 
teachers  ? 

Mr.  Keeler:  Well,  it  is  a  county  normal  state  certificate.  State  normal 
schools  give  credit  for  that  work,  also  the  University  of  Michigan 
gives  credit  for  it.  It  is  a  part  of  our  educational  system  of  Mich- 
igan. I  think  that  the  State  of  Michigan  gets  better  value  received 
for  the  money  spent  in  those  county  normals  than  from  any  other 
money  they  spend ;  the  per  capita  is  less  than  for  any  other  institu- 
tion. High  school  graduate's  go  a  year  and  then  get  those  certifi- 
cates; they  live  cheaper,  can  go  home  Friday  nights,  and  the  girl  is 
a  year  older  before  she  gets  away  to  school,  and  generally  three  or 
four  years,  as  she  usually  teaches  a  few  years  after  getting  the  cer- 
tificate. That  is  the  County  Normal  System. 

Then,  the  University  and  these  colleges  prepare  the  high  school 
teachers;  the  normal  schools  prepare  some  high  school  teachers,  but 
it  is  90  per  cent  grade  teachers  that  the  normals  prepare ;  and  I  will 
say  that  the  State  of  Michigan  is  quoted  more  than  any  of  the  forty- 
eight  because  of  their  system ;  for  instance,  if  a  person  graduates 
from  the  sixth  grade  here  in  Lansing  ami  moves  to  another  city,  they 
would  be  put  in  the  seventh  grade  without  examination.  Also  in  the 
matter  of  certification ;  I  have  been  very  careful  in  seeing  that  every 
teacher  in  the  State  of  Michigan  has  their  legal  certificate;  I  saw 
that  one  thousand  teachers  in  Detroit  who  did  not  have  any  legal 
certificates  were  provided  with  them ;  perhaps  the  teacher  was  a  good 
teacher,  but  she  was  not  legally  qua li lied,  so  we  got  busy  and  now 
every  teacher  is  legally  qualified. 

Mr.  Lord:     What  were  those  teachers  teaching  on? 

Mr.  Keeler:  No  certificate  at  all;  years  ago  they  had  one,  but  it  had 
expired;  now  every  teacher  in  the  State  of  Michigan  has  a  legal  cer- 
tificate, same  as  men  have  licenses  to  practice  medicine,  etc.  In 
Detroit,  these  certificates  expire  in  four  years,  then  they  are  renewed 
and  now  in  Detroit  they  hire  no  teacher  but  who  has  a  life  cert  hi 
cate;  a  teacher  couldn't  get  in  in  any  other  possible  way;  thai  is  a 
requirement  of  the  board. 

Mr.  Lord:     Do  you  issue  life  certificates  on  examination? 

Mr.  Keeler :  Yes ;  we  are  going  to  have  examination  next  week ;  not  verj 
many  take  it,  but  we  give  them  a  life  certificate. 

Mr.  Lord :  The  point  I  want  to  make  is,  does  the  city  of  Detroit  hire 
teachers  whom  you  grant,  on  your  examinations,  a  life  certificate  ? 

Mr.  Keeler:     Yes,  sir. 

Mr.  Lord :  Now,  to  what  extent  has  the  duties  of  your  office  or  depart- 
ment here  increased  since  you  have  been  superintendent,  by  statute 
or  otherwise? 

Mr.  Keeler:  In  the  first  place,  this  course  of  study  I  spoke  of,  that  is 
statutory  in  country  districts ;  then,  we  approve  the  plans  of  all  school 
buildings  in  the  State  of  Michigan  and  that  takes  some  time  and 
thought,  and  I  believe  the  people  of  the  State  of  Michigan  who  come 
in  contact  with  us  and  who  build  buildings  will  say  that  we  have 
been  a  very  valuable  asset.  I  think  this  is  one  of  the  most  important 
things  we  do;  you  take  the  country  schools,  I  think  within  the  last 
five  years  that  we  have  started  a  sort  of  new  lease  on  life  for  farmers 
in  the  building  proposition ;  we  furnish  plans,  specifications,  etc.,  so 


93 

that  they  can  take  them  and  let  the  contract  right  off  for  any  build- 
ing, school  buildings,  they  build. 

Mr.  Lord:     Have  you  any  authority  as  regards  sanitary  conditions? 

Mr.  Keeler:  That  is  it,  we  have  absolute  authority.  We  kind  of  work 
that  along  smoothly ;  we  could  say  that  you  couldn't  use  this  building, 
but  we  go  and  have  a  talk  with  them  and  I  will  say  that  we  have 
only  had  to  condemn  two  in  the  State  of  Michigan,  but  because  we 
have  authority,  it  does  the  job.  You  see  quite  a  good  many  "Stand- 
ard" schools  as  you  drive  around ;  that  is  where  a  school,  teacher  and 
all  is  up  to  standard. 

Mr.  Lord :     In  that  case  you  authorize  the  school  to  use  that  title  ? 

Mr.  Keeler:  Yes,  sir.  Take  Allegan  county;  two-thirds  of  the  schools 
in  that  county  have  that  plate  on.  The  school  commissioner  got  the 
thing  started  and  if  one  district  gets  it,  the  next  district  wants  the 
same  thing  and  they  often  ask  us  to  come  over  and  talk  to  their  board. 
Also,  we  have  a  good  deal  of  auditing  to  do ;  you  take  eight  thousand 
school  treasurers  or  more  and  they  get  mixed  up. 

Mr.  Thompson:     What  do  you  audit? 

Mr.  Keeler:  The  books  of  the  treasurer,  where  they  spend  their 
money,  etc. 

Mr.  Thompson :     Their  entire  tax  levy? 

Mr.  Keeler :  Yes,  their  entire  tax  lexy ;  we  have  absolute  control  legally 
of  not  only  primary  money,  but  every  cent  they  spend. 

Mr.  Lord :     What  do  you  do  when  you  find  a  crook? 

Mr.  Keeler :     Collect  the  bonds  and  put  him  out. 

Mr.  Lord :  Have  you  established  a  uniform  system  of  accounting  for 
them  ? 

Mr.  Keeler:     Yes,  sir;  Mr.  Otwell  and  Mr.  Coffey  handle  that. 

Mr.  Lord :  How  often  do  they  examine  ? 

Mr.  Keeler :  We  get  a  financial  report  of  every  district  each  year  and 
they  are  all  examined.  We  couldn't  go  to  every  district  like  a  bank 
examiner,  but  this  is  the  way  it  generally  works  out;  the  members 
of  the  board  watch  the  expenditures  of  the  fellow  and  99  per  cent  of 
the  country  fellows  are  good,  but  there  is  one  that  isn't.  We  go  down 
and  look  at  his  records,  go  over  them  all,  check  him  up ;  Sometimes 
one-quarter  of  them  are  checked  up.  The  people  of  the  country  dis- 
tricts watch  them  pretty  closely.  If  a  man  buys  a  Ford  and  ought 
not  to,  the  neighbors  say,  "He  is  using  school  money."  We  couldn't 
audit  all  eight  thousand.  I  have  two  men  and  of  course  they  do  a 
great  niany  other  things,  but  they  really  are  auditors. 

Mr.  Lord:     How  long  have  you  been  doing  that  work? 

Mr.  Keeler :     About  eight  years.    I  started  that  when  I  was  deputy. 

Mr.  Lord:     That  is  statutory? 

Mr.  Keeler:     Yes,  sir. 

Now,  I  might  say  that  we  would  like  to  lead  the  educational  system 
in  Michigan ;  in  other  words,  we  think  that  is  our  job.  I  get  out  a  good 
many  bulletins,  they  are  used  in  the  schools  of  Michigan,  not  only  in 
public  schools,  but  I  have  taken  a  good  deal  of  pains  to  send  one 
copy  of  every  bulletin  to  parochial  schools  of  Michigan ;  with  that  a 
letter  saying  if  they  can  use  it  to  let  us  know  how  many  copies  they 
wish,  and  there  isn't  a  day  that  we  are  not  sending  out  a  quantity  of 
those  to  these  parochial  schools. 


94 

Mr.  Lord:    What  is  the  nature  of  these  bulletins? 

Mr.  Keeler:  Well,  they  are  on  history,  language,  arithmetic,  courses  of 
study,  geography,  etc. 

Mr.  Lord:     Are  they  used  in  connection  with  text-books? 

Mr.  Keeler:  Yes,  and  to  save  text-books;  a  good  many  times  we  send 
them  to  get  the  teacher  and  others  interested  in  school  matters,  to  get 
a  broader  understanding  than  they  would  from  text-books. 

Mr.  Lord :  Is  there  any  way  you  can  cut  down  the  size  of  your  report  or 
book  publications  of  any  kind  and  get  all  the  information  you  think 
is  necessary? 

Mr.  Keeler:  I  don't  think  so;  we  watch  that  very  closely,  they  aren't 
large. 

Mr.  Lord :  This  primary  school  money  proposition  that  you  started  on ; 
you  can  tell  us  about  that  if  you  will. 

Mr.  Keeler:  The  law  in  Michigan  is  to  distribute  that  between  boys 
and  girls  between  ages  of  five  and  twenty.  The  law  requires  every 
district  to  take  a  census;  we  examine  that  census  and  we  find  that 
quite  a  good  many  districts  try  to  pad  it  and  we  catch  them  at  it. 

Mr.  Lord :     How  do  you  catch  them  ? 

Mr.  Keeler :  Well,  take  the  city  of  Flint,  once  I  went  over  to  Flint  with 
a  lot  of  these  reports.  I  said,  "Why,  you  have  not  taken  a  good 
census" ;  he  didn't  have  much  use  for  me  on  the  start  and  then  I  said, 
"You  have  the  same  children  in  both  the  fourth  and  fifth  wards ;  I  can 
give  you  any  number  of  families  that  are  in  more  than  three  times." 
He  called  me  everything,  said  it  wasn't  so,  etc.  I  told  him  that  he 
better  keep  cool  and  said,  "I  want  a  meeting  of  your  board  and  I  want 
to  show  you,  according  to  your  own  reports,  that  this  family  is  in  the 
first,  third,  fourth,  fifth  and  eleventh  wards."  George  Cook  was  on 
the  board  and  he  told  him,  "You  should  be  a  little  careful,  he  isn't 
over  here  for  nothing.  He  has  got  us  or  he  wouldn't  be  here."  The 
amount  they  expected  to  get  amounted  to  160,000.00  more  than  we 
gave  them.  The  law  is  very  strict  on  that.  I  said,  "The  only  thing 
you  can  do  is  to  have  a  new  census  taken.  Of  course,  you  would  lose 
all  tjie  primary  money  this  year  in  the  city  of  Flint,  but  we  will  give 
you  thirty  days  to  take  a  new  census."  And  that  is  what  they  did. 
I  went  down  to  Detroit,  there  was  an  awful  increase  down  there ;  I 
got  hold  of  Reeves  and  I  took  lists  of  the  children  and  got  hold  of  the 
fathers  and  mothers  of  them ;  I  stayed  a  week  down  there.  Some  of 
the  wards  increased  a  great  deal ;  one  increased  seventeen  times  that 
one  year,  so  many  more  children,  and  that  is  what  made  us  sus- 
picious ;  but  it  checked  up  all  right. 

Mr.  Lord :  That  increase  was  not  actual,  but  the  result  of  incompetent 
men  to  take  the  census  in  previous  years;  it  was  not  an  actual 
increase  in  population. 

Mr.  Keeler :  I  was  very  well  satisfied  with  conditions  down  there.  Here 
at  Ionia  one  day  we  found  names  of  a  lot  of  children  that  had  never 
lived  there. 

Mr.  Lord :  Have  you  in  the  distribution  of  the  primary  fund  ever  made 
a  very  close  examination  of  the  census  returns  compared  with  the 
total  population  of  one  county  with  another  having  similar  popula- 
tion? It  looks  as  if  there  was  a  good  deal  of  indiscrimination  in  the 
matter,  not  the  result  of  inefficiency  on  your  part,  but  it  looks  to  me 


that  either  some  counties  are  padding  their  school  population  or 
that  other  counties  are  deficient.     Seems  to  me  that  there  is  some- 
thing wrong. 
Mr.  Keeler :     There  is. 
Mr.  Lord:     Where  is  it? 

Mr.  Keeler :     I  don't  believe  it  is  in  the  school  census.    For  instance,  we 
take  the  third  ward  of  Bay  City;  when  we  check  that  we  take  the 
previous  years,  check  the  children,  find  those  past  twenty  and  cut  off 
the  list ;  we  have  worked  it  right  along  every  year  and  I  have  conn-  ' 
dence  in  our  reports  and  our  work  on  it. 
Mr.  Lord :     How  do  you  check  up  fictitious  names  when  they  are  padded  ? 
Mr.  Keeler:     I  have  a  force  here,  some  of  them  have  been  here  twenty 

years,  and  they  kind  of  smell  them.     We  get  them. 
Mr.  Lord:     Where  there  is  not  effective  work  on  the  part  of  enum- 
erators, you  have  no  means  of  knowing  that,  have  you?    I  would 
like  to  add,  don't  you  think  the  enumerators  should  be  appointed 
by  the  Superintendent  of  Public  Instruction? 
Mr.  Keeler :     Yes  sir ;  I  do.     We  don't  have  any  trouble  in  country  dis- 
tricts, it  is  in  the  city;  they  appoint  their  force  and  we  don't  have 
anything  to  do  with  it. 
Mr.  Lord:     I  have  been  astounded,  really,  in  working  out  these  things 
on  our  tax  statements,  to  see  what  seems  to  be  gross  indiscrimina- 
tion in  the  distribution  of  school  money.     It  isn't  right  that  Saginaw 
County,  for  instance,  having  a  population  about  equal  to  Bay  City 
would   have   one-third   more   children   than    Bay    City;   that   isn't 
possible. 
Mr.  Keeler:     I  would  expect  it  to  be  the  reverse  knowing  those  cities 

as  I  do ;  of  course,  if  we  had  more  help  we  could  do  a  better  job. 
Mr.  Lord :     I  have  often  wondered  if  there  is  not  some  other  method  by 

which  the  primary  money  could  be  more  equitably  distributed. 
Mr.  Keeler:     You  would  have  to  change  the  constitution. 
Mr.  Lord:     You  take  the  County  of  Wayne,  the  amount  received  was 

$1,400,000.00  and  the  state  tax  was  nearly  three  million  dollars. 
Mr.  Keeler:     Of  course,  there  is  so  much  valuable  property  down  there, 

and  lots  of  folks  have  small  families. 
Mr.  Lord:     And  lots  have  big.     We  have  a  large  foreign  population  in 

Detroit. 

Mr.  Keeler :  I  think  one  thing  I  would  like  to  have  the  Budget  Commis- 
sion look  at  favorably,  if  they  could  see  it  as  I  do.  This  department 
can  have  any  number  of  people  on  the  payroll,  but  outside  of  three 
or  four  the  average  salary  we  can  pay  is  not  more  than  $1,100.00. 
I  don't  want  any  more  than  I  need  but  I  would  like  to  have  a  few 
better  people;  if  we  are  going  to  lead  the  procession,  we  can't  lead 
with  that  class  of  folks.  The  Superintendent  of  Public  Instruction 
gets  $4,000.00  a  year,  the  Deputy  gets  $2,500.00,  and  two  others  get 
$2,100.00 ;  the  rest  of  them  I  can't  average  over  $1 ,100.00.  I  ought 
to  have  some  people  to  whom  I  could  pay  more  money. 
Mr.  Lord  :  What  would  be  their  duties  ? 

Mr.  Keeler :     I  need  a  man  on  this  census  work ;  I  couldn't  send  a  woman 
up  to  Bay  County;  and  I  haven't  men  enough  to  do  it  now;  it  might 
necessitate  spending  a  week  in  Bay  City. 
Mr.  Lord :     What  would  that  man  have  to  receive  ? 


96 

Mr.  Keeler:  I  couldn't  hire  a  man  who  would  have  the  confidence  of 
the  people  for  less  than  $2,000.00  a  year. 

Mr.  Lord  :     Would  it  be  necessary  to  employ  a  school  man  for  that  work 

Mr.  Keeler:  No,  sir.  Any  bright  young  fellow.  The  State  of  Michigai 
is  leaning  on  us  to  set  the  standard  of  things.  A  couple  of  mei 
ought  to  be  here  in  the  office  so  that  they  could  look  after  some  o1 
these  things.  One  of  the  men  here  now  looks  after  the  fifty  count? 
normals,  has  charge  of  certain  publications  that  I  give  to  him  am 
that  keep  him  writing  a  great  deal  of  the  time;  he  has  charge  ol 
the  University  and  high  schools  also.  My  other  two  men  have  charge 
of  auditing  of  reports,  of  starting  schools,  the  buildings,  as  we  ai 
building  all  the  while. 

Mr.  Lord :     The  employment  of  these  assistants  was  necessitated  by  nei 
duties  and  laws  ? 

Mr.  Keeler:  Yes  sir.  I  am  liable  to  have  a  letter  from  Chadsey  ask- 
ing if  it  would  not  be  a  good  thing  to  get  something  out  on  a  certain 
subject  and  I  am  liable  to  ask  Chadsey  or  Miller  to  come  here  as  I 
try  to  use  the  school  men,  and  many  times  I  have  paid  their  expenses 
out  of  my  own  pocket  as  I  couldn't  put  through  a  voucher. 

Mr.  Lord:  Mr.  Keeler,  have  you  got  too  much  in  your  course  of  study 
in  high  schools,  are  the  children  crowded  too  much  ? 

Mr.  Keeler:  No,  sir;  that  is  one  point  I  make;  I  have  a  speech  I  hav< 
given  in  several  states,  "Fewer  Things  Better  Done."  I  take  m; 
course  of  study  along  and  we  have  about  one-half  as  much  as  othei 
states. 

Mr.  Lord:  Has  it  been  your  observation,  particularly  in  Detroit,  that 
they  are  trying  to  cram  so  much  down  the  necks  of  the  children, 
that  they  are  not  perfect  in  any  one  thing? 

Mr.  Keeler :     Yes,  sir. 

Mr.  Lord:     What  studies  would  you  eliminate? 

Mr.  Keeler :  My  idea  is  that,  here  is  about  what  children  ought  to  have : 
spelling,  writing,  reading,  arithmetic.  I  want  them  to  get  those  as 
I  had  to  in  the  country  school,  they  are  the  important  things.  Lots 
of  times  when  the  high  school  graduates  are  taken  into  banks,  they 
are  weak  along  those  lines. 

Mr.  Lord:     Are  there  too  many  frills  connected  witli  the  high  schools? 

Mr.  Keeler:     There  are,  yes  sir. 

Mr.  Lord :  I  believe  there  is  really  very  little  education  in  those  frills, 
fads  and  fancies,  as  I  call  them,  and  they  are  getting  more  and  moi 
prominent  in  high  schools,  especially  in  some  of  the  larger  cities, 
and  they  are  expensive;  they  are  the  expensive  part  of  the  school  and 
many  of  them  the  children  like  better  than  to  sit  down  with  their 
arithmetic. 

Mr.  Keeler:  I  am  just  old-fashioned  enough  to  believe  that,  and  when 
they  put  me  on  the  platform  with  the  other  fellow  and  I  put  this  up 
to  the  people,  he  is  knocked  down  all  around.  He  hasn't  the  goods 
to  defend  himself. 

Mr.  Lord:  The  educational  system  of  Michigan  is  costing  an  immense 
sum  of  money. 

Mr.  Keeler:  Not  nearly  as  much  as  some  other  states.  Wisconsin  is 
where  they  have  gone  into  fads  and  fancies,  they  have  gone  the 
limit. 


97 

Mr.  Lord:  It  seems  to  me  that  there  are  some  of  these  that  could  be 
eliminated.  Barring  the  ordinary  three  "R's,"  what  do  you  think 
the  country  schools  should  give  and  what  do  you  think  the  state 
high  schools  should  give? 

Mr.  Keeler:  Country  schools  should  have  the  three  "R's,"  a  pretty 
thorough  course  in  agriculture,  some  civil  government,  (and  we  out- 
line that  in  our  course  pretty  thoroughly),  a  course  in  physiology, 
because  so  many  of  them  never  have  a  chance  to  get  next  to  their 
own  bodies;  in  high  schools,  English,  and  the  matter  of  English  is 
so  important  all  through  life  they  can't  have  too  much  of  it  and  I 
know  it;  besides  that  they  must  have  history,  not  just  cram  twenty 
weeks  of  U.  S.  history  but  a  course  in  it ;  also  a  year  of  good  litera- 
ture, algebra  and  geometery ;  I  don't  think  that  even  a  town  like  Bad 
Axe  needs  very  much  foreign  language  and,  of  course,  not  any  Ger- 
man at  all.  I  think  there  are  more  important  things  to  teach  them 
than  so  much  German,  Latin,  etc. 

Mr.  Lord :     Latin  is  a  fine  thing  in  connection  with  the  English. 
!r.  Keeler:     Yes,  but  I  have  always  thought  that  high  schools  thought 
they  had  to  teach  too  many  foreign  languages;  I  believe  two  years 
of  Latin  is  enough  for  any  high  school  boy  or  girl. 
Getting  back  to  the  office,  we  are  trying  to  lead  and  in  order  to  do 
that,  I  need  stenographers  that  can  do  their  work,  but  they  can't  do 
the  kind  of  work  we  want  to  do. 

T.  Lord:     You  want  additional  help  at  an  average  of  not  to  exceed 
12,000.00  a  year? 

Mr.  Keeler :     Yes,  I  don't  need  so  many  of  those,  but  two  or  three. 

Mr.  Lord:     We    have    got    to    go    pretty    slow    in    recommending    any 

increases  because  of  the  extraordinary  expenditures. 
T.  Keeler:     Yes,  but  you  have  to  consider  that  every  year  the  legisla- 
ture puts  me  on  a  board  so  that  my  time  as  Superintendent  of  Public 
Instruction  is  more  than  one-half  spent  on  business  outside  of  the 
department;  for  instance,  the  Board  of  Auditors  takes  a  lot  of  my 
time ;  thex  State  War  Board,  the  boards  of  the  Educational  Institu- 
tions, and  I  try  to  keep  in  touch  with  them ;  the  Board  of  Escheats 
and  there  are  quite  a  good  many  other  things  I  do. 
T.  Lord:     You  audit  the  State  Treasurer's  books  and  count  the  cash, 
don't  you? 

Mr.  Keeler :     Yes,  sir. 


STATE  HIGHWAY  DEPARTMENT 

Mr.  Thompson :     Mr.   Rogers,   the  first  subject,    is  the  scope  of  your 
department,  what  are  your  activities? 

Mr.  Rogers:     That  is  generally  covered  in  the  preamble  of  Section  1, 
Chapter  5,  General  Highway  Laws : 

"There  is  hereby  created  and  established  a  state  highway  depart- 
ment, which  shall  be  charged  with  the  giving  of  instruction  in 
the  art  of  building,  improving  and  repairing  public  wagon  roads 
and  bridges,  collecting  reports  from  township  and  county  high- 
way commisioners,  overseers  of  highways  and  superintendents 
and  commissioners  of  streets  in  villages  and  cities,  and  with  the 


98 

distribution  of  any  state  reward  for  improving  the  wagon  roads, 
that  this  legislature  or  any  future  session  may  provide  for,  or 
any  funds  that  may  be  given  to  the  state  for  such  purposes  by 
the  United  States  Government." 

Mr.  Thompson:     What  divisions  of  highway  work  do  you  have;  how  do 
you  divide  your  work? 

Mr.  Rogers:  (1)  In  the  early  days  of  this  department  we  spent  our 
winters  attending  road  meetings,  farmers'  institutes,  etc.;  there 
wasn't  much  of  a  department  except  the  Commissioner  and  myself, 
and  traveling  expenses  were  the  only  additional  expense  to  the 
department.  Now,  our  work  consists  of,  so  far  as  the  old  act  is  con- 
cerned, making  proper  specifications  for  roads  under  contract,  pay- 
ing state  rewards,  etc.  We  have  divided  the  state  into  districts  for 
convenience  in  the  work,  and  have  two  men  traveling  out  of  this 
office,  with  assistants,  handling  the  eastern  and  southeastern  part  of 
Michigan;  have  district  engineers  located  at  Kalamazoo  handling 
southwestern  Michigan ;  at  Cadillac  handling  northwestern  Mich- 
igan ;  one  at  Saginaw  in  the  Saginaw  valley  portion,  Huron  and  Tus 
cola  counties,  and  district  engineer  in  the  Upper  Peninsula  at  Escan 
aba.  The  engineer  at  Cadillac  has  had  from  one  to  two  assistants 
during  the  summer,  and  there  were  two  assistants  to  the  two  men 
traveling  out  of  this  office.  We  are  now  about  to  add  Mr.  Neilson 
who  is  to  have  full  charge  of  the  maintenance  work,  acting  with  the 
different  district  engineers  and  county  commissioners,  and  trying  to 
get  a  better  maintenance  organization. 
(2)  The  Trunk  Line  Act  provides  for  the  paying  of  double  rewards 
on  trunk  line  roads.  That  system  now  embraces  about  four  thou 
sand  eight  hundred  miles  of  highways,  laid  out  by  the  legislature  of 
1913  in  this  way;  naming  the  cities  and  townships  of  the  state  which 
should  be  connected  by  trunk  lines,  leaving  the  exact  routing  to  be 
determined  by  the  State  Highway  Commissioner  and  local  officials 
Those  have  all  been  practically  established  now,  with  few  exceptions 
and  the  work  of  paying  the  double  rewards  goes  on. 
The  Trunk  Line  Act  provides  further  that  the  state  shall  make  al 
surveys  and  plans  for  trunk  line  roads,  build  trunk  line  bridges  and 
culverts,  bridges  to  be  constructed  only  when  the  county,  good  roads 
district  or  township  has  sufficient  funds  and  agrees  to  construct  at 
lease  three  miles  of  road  on  the  trunk  line,  including  the  bridge  site 
That  only  applies  to  bridges  of  more  than  thirty  feet  clear  span. 
Section  4,  of  Act  334,  P.  A.  1913,  has  been  very  slightly  amended  by 
the  legislature  of  1915  and  1917. 
I  would  like  to  say  that,  of  course,  the  very  act  which  put  the  survey 
of  the  trunk  lines  on  the  State  Highway  Department  has  increased 
the  duties  of  the  department  and  size  of  the  department  way  beyonc 
any  that  heretofore  existed.  In  fact,  that  is  a  very  large  part  of  our 
duties  at  the  present  time.  We  have  spent  between  four  and  five 
hundred  thousand  dollars  in  trunk  line  bridges  in  the  state  since  the 
act  took  effect. 

Mr.  Thompson:     Have  you   all   the   trunk   line   determined   and   their 
routes  ? 

Mr.  Kogers:     No,  not  quite,  but  very  nearly.    There  are  a  few  gaps  here 
and  there  where  there  has  been  a  little  discussion  as  to  the  location 


99 

simply  a  question  of  whether  we  take  this  road  or  some  other  road 
nearby. 

Mr.  Thompson:     Will  there  be  others  laid  out  in  the  future? 

Mr.  Rogers:  The  limit  under  the  present  law  is  three  miles  to  a  sui- 
veyed  township,  fractional  townships  to  be  figured  pro  rata.  Irregu- 
lar counties  don't  work  out  that  way;  it  gives  them  their  mileage 
according  to  area. 

By  the  maintenance  of  this  act  we  are  required  to  see  that  various 
townships,  counties  and  good  roads  districts  maintain  their  roads  in 
a  satisfactorj'  condition,  or  to  withhold  their  reward.  We  are  further 
given  authority  that,  in  case  they  fail  to  maintain  the  roads  satisfac- 
torily, we  can  go  on  and  expend  any  moneys  that  are  due  for  such 
rewards.  And,  the  last  legislature  gave  us  authority,  if  there  were  no 
moneys  due  them,  to  put  the  roads  in  repair  and  order  an  assessment 
to  pay  for  them. 

(3)  The  Covert  Act,  first  passed  in  1915  and  amended  in  1917,  pro- 
vides for  the  building  of  roads  on  application  of  a  certain  number  of 
the  owners  of  the  lineal  frontage  of  lands  fronting  or  touching  upon 
any  highway.     Originally,  it  provided  that  petition  must  be  signed 
by  fifty  per  cent  of  the  owners  of  the  frontage  upon  any  highway, 
not  less  than  two  miles  in  length,  and  petition  be  addressed  to  the 
County  Road  Commissioner ;  if  intercounty  road,  or  in  a  county  not 
operating  under  the  county  road  system,  the  petition  to  go  direct  to 
the   State  Highway   Commission.     This   has   been   responsible-  for 
extensive  activities  of  this  department  during  the  last  two  years. 
We  were  unable  to  sell  bonds  under  the  act  of  1915,  and  we  had  to 
suspend  operations  until  after  the  session  of  the  legislature  of  1917. 
Since  that  time  we  have  actually  sold  about  f 600,000.00  worth  of 
bonds,  and  about  |300,000.00  has  been  actually  paid. 

We  have  roads  under  construction  in  Ionia,  Hillsdale,  losco,  Oceana, 
Newaygo,  Muskegon  and  Huron  counties,  and  numerous  other  roads 
in  various  sections.  Under  this  act,  the  state  takes  charge  of  the 
roads.  We  have  to  thoroughly  survey  the  highway,  make  plans  and 
specifications  for  proper  improvement  for  such  highway ;  in  fact,  we 
do  everything  from  the  start.  The  state  is  temporarily  carrying  the 
load  of  all  of  these  roads,  trunk  line  and  otherwise.  We  are  author- 
ized under  the  Trunk  Line  Act,  that  whenever  we  get  a  petition  under 
the  Covert  Act,  which  is  on  the  trunk  line,  the  state  bears  the 
expense. 

The  Covert  Act,  in  itself,  does  not  provide  for  any  way  of  immedi- 
ately financing  that  work,  and  we  have  to  carry  that  work  from  the 
"general  fund"  and  from  the  "trunk  line  fund"  if  the  work  is  on  the 
trunk  line.  In  fact,  we  have  had  to  handle  it  mostly  from  that  and 
return  it  to  the  state  as  we  can  collect  it  from  the  different  roads. 

(4)  The  fourth  activity  is  the  Federal  Aid  Road  Law.     This  law 
provides  the  sum  of  f  75,000,000.00  for  the  construction  of  rural  post 
roads  in  the  several  states  during  the  next  five  years,  and  is  divided 
among  the  states,  one-third  according  to  area,  one-third  according 
to  population,  and  one-third  according  to  post  road  mileage.    Mich- 
igan will  get,  I  estimate,  about  |2,187,000.00.    The  only  factor  that 
varies  is  the  post  road  mileage  from  year  to  year,  which  makes  it 
impossible  for  us  to  tell  what  we  will  get  for  the  five-year  period.  We 


100 

fell  down  about  $2,000.00  on  our  third  allotment  from  what  I  ha< 
figured.  This  was  on  account  of  a  little  change  in  post  road  mileage 
over  the  country. 
There  has  been  made  available  under  this  act  the  first  three  allot 
ments  : 

First $14r>.7S:J.7L> 

Second 291,507.44 

Third IXVtfG.S? 

Those  are  the  first  three  out  of  the  five.    We  have  not  the  money,  o 
course,  but  there  have  been  six  projects  put  up  to  the  government 
One  contract  has  been  let  and  the  road  is  under  construction,  an< 
the  others  are  in  process  of  getting  along  to  that  point.     We  liav 
had  project  statements  enough  allowed  to  practically  exhaust.  <>u 
first  two  allotments,  and  of  the  third  allotment  no  money  could  1> 
used  until  after  the  first  of  next  July.    The  type  of  road  is  anythin 
that  the  Federal  Government  will  approve.     Usually,  anything  thi 
state  has  suggested  has  met  with  approval.     Now,  for  instance,  th 
first  project  put  forth  was  for  a  road  in  the  Upper  Peninsula,  acros 
Baraga  county,  through  to  the  copper  country.     In  the  first  placi 
the  Federal  Government  asked  us  to  submit  to  them  a  general  schem 
of  trunk  line  road  system  of  the  state,  and  they  have  requested  repeat 
edly  that  these  roads,  as  far  as  possible,  be  kept  on  main  lines,  an 
also  on  roads  of  interstate  importance  as  much  as  possible.     They 
are  also  quite  insistent  that  the  roads  be  post  roads.     The  Baraga 
road  is  not  a  post  road  and  we  had  to  go  to  Washington  and  through 
the  congressmen's  aid  it  was  approved.     I  did  make  one  promise  to 
the  Secretary,  that  I  would  not  ask  him  to  bend  his  rule  for  any 
other  project  in  Michigan.    We  are  using  this  money  just  as  soon  as 
possible  to  fill  in  the  gaps  on  the  trunk  line  roads.    This  act  was  fol- 
lowed up  by  the  State  Federal  Aid  Act,  which  gives  the  state  author- 
ity to  make  contracts,  with  the  government,  for  carrying  on  the  work. 
The  general  Federal  Act  provides  that  this  shall   be  done  by  the 
various  state  highway  departments,  and  the  state  followed  it  up  with 
an  enabling  act,  for  the  two  succeeding  years,  to  pay  the  state's  por- 
tion of  the  Federal  Act.    The  State  Federal  Aid  Act  provides  that 
this  federal  aid  money  shall  be  distributed  to  the  counties — not  neces- 
sarily to  all  counties — but,  if  it  goes  to  any  county  or  township,  we 
may  aid  the  poorer  counties  more  than  the  larger  ones,  working  it 
out  on  this  basis,  according  to  the  valuation  per  trunk  line  mile. 
I  might  say  here  that  the  values  for  this  unit  vary  widely,  from 
Oscoda  at  the  bottom  to  Wayne  at  the  top.    Oscoda  has  a  valuation 
of  about  §25,000.00  and  Wayne  county  about  f  16,000,000.00  per  trunk 
line  mile.     Counties  having  valuations  of  $100,000.00  and  less  may 
receive  25  per  cent  from  the  state  and  pay  25  per  cent  themselves, 
and  get  the  remaining  50  per  cent  from  the  Federal  Aid  ;  those  having 
valuations  of  f  100,000.00  to  $200,000.00  per  trunk  line  mile  pay  20 
per  cent  themselves  and  get  20  per  cent  from  the  state,  and  so  on  up 
until  we  reach  the  counties  having  $500,000.00  per  trunk  line  mile 
where  they  are  required  to  pay  the  full  50  per  cent  and  the  state's 
only  expense  is  to  pay  for  taking  care  of  the  supervision.     This  is 
true  except  one  condition,  the  Federal  Aid  money  is  limited  to 
$10,000  a  mile  for  the  government's  portion;  hence,  if  we  build -a  road 


101       :,,,/;<,;,  H'OR^n* 

costing  over  $20,000.00  a  mile,  the  state  would  have  to  step  in  and 
pay  the  additional  cost. 

Mr.  Thompson :     To  what  classes  of  road  would  it  be  alloted  ? 

Mr.  Rogers :  Any  township  or  county  is  at  liberty  to  make  application 
to  this  department  for  Federal  Aid,  and  projects  taken  up  by  this 
department,  on  what  we  call  "project  statements,"  and  they  are 
passed  on  at  Washington  and  allowed  or  disallowed.  We  have  sub- 
mitted to  the  department  at  Washington  a  plan  showing  our  trunk 
line  system,  showing  the  gaps  and  practically  telling  them,  as  far  as 
possible,  how  we  shall  act,  and  how  these  Federal  Aid  funds  shall  be 
used  for  closing  in  these  gaps. 

(5)  Bridge  Department.  This  is  a  branch  of  the  trunk  line  work. 
In  addition  to  the  regular  work  of  designing  and  building  bridges 
under  the  Trunk  Line  Act;  we  are  also  authorized  to  prepare  plans 
for  townships  and  to  advise  counties  regarding  plans.  Quite  a  share 
of  the  activities  of  the  department  has  been  to  prepare  plans  and 
assist  townships  and  counties  with  their  own  building.  We  prac- 
tically furnish  the  engineering  services. 

Mr.  Belknap:  Under  the  Covert  Act  the  money  is  borrowed  upon  the 
proceedings.  If  we  have  been  correct  in  our  proceedings  all  the  way 
through,  in  the  holding  of  the  hearings  of  objections,  regarding  our 
contract,  and  review  of  special  assessment  roll,  we  can  then  adver- 
tise to  sell  bonds,  and  upon  these  proceedings  we  borrow  this  money. 
We  do  not  borrow  the  first  year,  as  a  usual  thing,  because  the  law 
provides  there  is  no  interest  on  first  year's  special  assessment  rolls. 
The  money  must  be  placed  in  banks,  in  the  different  counties,  which 
are  approved  by  the  department,  if  the  department  is  handling  the 
proceedings,  otherwise  banks  are  approved  by  the  Board  of  Super- 
visors, and  it  is  necessary  for  us  to  go  into  the  matter  of  designating 
the  proper  bank.  Many  of  the  state  banks  have  only  a  capital  of 
120,000.00  and  there  does  not  seem  to  be  any  method  in  the  act  which 
provides  a  proper  protection.  We  have  gone  into  that  by  requiring 
each  of  the  banks  to  furnish  the  County  Treasurer  with  a  suitable 
bond,  a  surety  bond  in  most  instances.  The  County  Treasurer  passes 
on  the  security  primarily ;  we  have  no  authority  to  "do  so,  but  we  have 
required  the  County  Treasurer  to  furnish  us  with  a  copy  of  the  bond. 

Mr.  Rogers:  When  money  has  been  sent  to  the  County  Treasurer,  we 
have  designated  in  advance  the  bank  in  which  it  shall  be  deposited. 

Mr.  Thompson:  Do  you  require  additional  bonds  from  County  Treas- 
urers ? 

Mr.  Rogers :  There  is  nothing  in  the  law'  that  would  give  us  authority 
to  ask  for  additional  bonds. 

Mr.  Thompson :     The  Attorney  General  has  so  advised  you  ? 

Mr.  Rogers:     No. 

Mr.  Thompson  :     What  bond  do  you  put  up  yourself  ? 

Mr.  Rogers:  Only  a  bond  for  faithful  performance  of  duties  of  the 
department,  f  5,000.00. 

Mr.  Thompson  :  What  are  your  suggestions  as  to  the  matter  of  handling 
this  money  through  this  department? 

Mr.  Rogers:  Well,  we  have  met  the  condition  as  it  is  rather  than  as  it 
might  be,  and  I  would  imagine  that  eventually  there  ought  to  be 
about  the  same  protection  as  with  any  other  officer  handling  a  large 


102 

amount  of  money.  We  have  no  discretion  in  picking  our  County 
Treasurers,  but  we  have  selected  the  banks  with  as  much  care  as  we 
can  and  have  required  a  proper  bond  to  the  County  Treasurer.  You 
will  see  from  our  voucher  check  that  we  simply  draw  an  order  under 
form  one  on  the  County  Treasurer.  We  go  further  than  that,  we 
specify  on  a  voucher  exactly  what  services  have  been  rendered  for 
which  it  has  been  drawn,  and  still  go  further  and  fill  out  the  check 
which  the  County  Treasurer  is  to  sign  on  the  depository  bank,  and 
banks  are  instructed  to  pa}7  no  checks  except  these  voucher  checks, 
showing  just  what  the  services  are.  The  check  is  tilled  out  ready 
for  County  Treasurer's  signature. 

Mr.  Belknap:  I  think,  perhaps,  there  is  one  point  that  has  not  been 
covered,  that  the  faith  and  credit  of  the  assessment  district  or  county 
is  pledged,  and  the  faith  and  credit  of  the  entire  state,  when  you 
sign  bonds. 

Mr.  Thompson:  These  funds  from  the  Covert  Act  are  deposited  in  the 
County  Treasurer's  office,  when  the  bonds  are  sold,  then  deposited  in 
depository  banks,  and  checked  out  by  the  check  of  this  department 
when  the  engineering  department  approves  the  road, 

Mr.  Rogers:  The  sale  of  the  bonds  has  been  by  advertising,  receiving 
bids  in  the  ordinary  way,  and  sold  in  that  way. 

Mr.  Thompson:     Do  you  have  many  bidders? 

Mr.  Rogers:  So  far  we  have  had  bids  from  Ellis  of  Grand  Rapids,  Cook 
of  Kalamazoo,  Detroit  Trust  Company,  F.  C.  Hayler  Company  of 
Toledo,  Justus  Meyer  Company  of  Cincinnati. 

Mr.  Thompson:  Before  offering  the  bonds  do  you  determine  the  rate 
of  interest? 

Mr.  Rogers:  The  law  specified  that  the  rate  shall  not  exceed  six  per 
cent.  The  bid  specifies  the  interest. 

Mr.  Thompson:     What  publicity  is  given  as  to  bond  offers? 

Mr.  Rogers:  We  have  been  advertising  in  the  Michigan  Investor  and 
usually  in  a  local  paper,  that  is  in  the  vicinity  of  the  job,  and  in  out 
of  state  papers;  then  we  circularize  all  bond  houses  we  have  had 
information  of. 

Mr.  Thompson:     How  many  bond  houses? 

Mr.  Rogers :     We  have  about  thirty  on  our  list,  I  believe. 

Mr.  Thompson:     How  do  you  arrange  to  pay  those  bonds? 

Mr.  Rogers:  The  bonds  are  serial  bonds  and  they  are  paid  from  the 
assessment  rolls.  The  bonds  have  been  made  payable  at  the  bonding 
offices  usually;  that  is,  the  bonds  held  by  Hayler  Company  are  pay- 
able at  the  Security  Bank  £  Trust  Company  at  Toledo,  those  held  by 
the  Detroit  Trust  Company  are  payable  at  their  place  of  business 
at  Detroit,  Ellis's  payable  at  his  own  bank. 

Mr.  Thompson :  Tell  us  about  the  financial  procedure  to  pay  these 
bonds. 

Mr.  Belknap :  It  is  necessary  for  this  department  to  make  out  a  special 
assessment  roll  which  is  usually  either  one-fifth  or  one-tenth  of  the 
total  amount.  We  send  that  properly  certified,  to  the  County  Clerk 
before  the  annual  meeting  of  the  Board  of  Supervisors.  The  Board 
of  Supervisors  orders  these  rolls  spread  and  collected  and  the  sums 
of  money  are  deposited  with  the  depository  banks  by  the  County 
Treasurer  when  collected. 


103 

Mr.  Rogers :  Of  course,  these  rolls  draw  six  per  cent  interest  under  the 
law,  except  the  first  year. 

Mr.  Thompson :     Tell  us  about  the  financing  of  your  other  activities. 

Mr.  Rogers :  By  direct  appropriation  of  the  legislature ;  we  have  f  35,0t)0 
for  the  next  two  years. 

Mr.  Thompson:  Does  this  department  have  any  receipts  other  than 
from  the  Covert  Act  and  direct  appropriation  by  the  legislature? 

Mr.  Rogers:  Nothing,  except  now  and  then  selling  a  blue  print  or 
county  map  for  about  enough  to  cover  the  cost  of  the  material  that 
is  in  it,  and  the  most  of  those  are  handed  out  officially  and  no 
charge  is  made. 

Mr.  Thompson:     What  about  the  automobile  tax  matter? 

Mr.  Rogers:  The  Secretary  of  State  and  Auditor  General  advise  us 
of  our  credits  as  they  come  due.  Those  are  all  paid  out  through 
the  Auditor  General's  office  in  regular  way  on  approved  vouchers. 
Of  course,  in  payment  of  state  rewards,  we  are  instructed  to  certify 
to  the  Auditor  General  that  such  a  road  is  completed  and  entitled  to 
state  reward,  and  he  in  turn  makes  an  order  on  the  State  Treasurer 
who  issues  a  check,  and  those  checks  are  mailed  out  from  this  depart- 
ment with  receipt  cards.  In  the  early  days  of  the  department  the 
money  was  transmitted  from  the  Treasurer's  office,  but  they  kept 
writing  us  about  it.  We  now  notify  the  Highway  Commissioner 
and  the  Township  Clerk,  in  addition  to  sending  a  card  to  Township 
Treasurer,  that  the  money  has  gone  forward,  so  the  Treasurer  don't 
have  a  chance  to  hold  it  very  long  without  someone  asking  about  it. 

Mr.  Thompson:  What  were  the  total  expenditures  by  the  department 
for  your  fiscal  year  ending  June  30th,  1917? 

Mr.  Rogers :  About  one  and  three-quarters  million ;  a  little  better  than 
one  and  one-half  million. 

Mr.  Thompson:     Coming  from  what  sources? 

Mr.  Smith  :     Trunk  line  appropriation $    600,000.00 

Automobile  tax 1,100,000.00 

Current  expense  appropriation 30,000.00 


$1,730,000.00 

Mr.  Rogers :  This  year,  we  have  a  Federal  Aid  appropriation  that  will 
have  to  bear  a  part  of  the  expense  of  Federal  Aid  Roads  and  expense 
from  Covert  Act. 

Mr.  Thompson :  From  what  you  can  see  now,  how  much  will  your  expen- 
ditures be  for  the  fiscal  year  ending  June  30th,  1918  ? 

Mr.  Rogers:  Probably  will  run  over  two  and  one-half  millions.  One- 
half  million  will  be  Covert  Act  money. 

Mr.  Thompson :  How  much  Covert  Act  money  do  you  expect  to  handle 
during  the  calendar  year  of  1918? 

Mr.  Rogers:  That  depends  a  whole  lot  on  whether  we  are  going  to  be 
able  to  build  roads  on  account  of  labor  conditions  and  car  condi- 
tions. If  we  do  anything  like  we  ought  to  it  would  be  $2,000,000 
but  we  are  going  to  do  well  if  we  build  $1,000,000  worth. 

Mr.  Thompson:  What  would  be  your  estimate  of  community  roads 
that  will  be  improved? 

Mr.  Rogers:  Something  over  70,000  miles  of  public  wagon  roads  in 
Michigan. 


104 

Mr.  Thompson:     How  many  miles  of  intertown  roads  are  improved? 

Mr.  Rogers :  A  little  over  5,000  miles  at  the  close  of  the  last  fiscal  year. 
.  Thompson :  How  many  miles  of  any  class  of  roads  are  in  process  of 
improvement  ? 

Mr.  Rogers:  We  couldn't  answer  that  very  specifically.  We  get  the 
applications  in  and  they  are  on  file  here.  There  are  more  than  double 
the  amount  of  roads  on  file  than  we  can  hope  to  complete  during 
any  succeeding  year.  I  thought  we  would  build  over  a  thousand 
miles  of  road  during  the  fiscal  year  but  things  are  slowing  down 
quite  a  little,  so  that  I  expect  when  the  fiscal  year  rolls  around  we 
will  not  have  anywhere  near  that  completed. 

Mr.  Thompson :  How  many  years  will  it  take  you  to  complete  the 
roads  as  planned  now? 

Mr.  Rogers :  We  have  5,000  of  the  15,000  miles  completed  and  are  build- 
ing roads  at  the  rate  of  1,000  miles  a  year.  All  of  the  5,000  should 
not  be  included  because  a  certain  per  cent  will  be  intertown  and 
community  roads. 

Mr.  Thompson :     Probably  it  will  continue  for  the  next  five  or  ten  years. 

Mr.  Rogers :  History  of  states  shows  that  they  have  grown  more  active 
year  by  year. 

Mr.  Thompson:     Does  this  department  purchase  anything? 

Mr.  Rogers:  Nothing  except  in  the  bridge  line".  We  are  buying 
bridges.  We  are  receiving  bids  and.  letting  contracts  for  trunk-line 
bridges  and  for  the  maintenance  of  trunk  line  bridges  right  along. 
We  find  it  necessary  in  some  instances  to  place  small  orders  where 
we  can  get  the  material  and  get  it  quickly,  such  as  creosote  lumber; 
and  the  small  amounts  of  supplies  that  go  into  the  drafting  room, 
such  as  materials,  books,  etc.,  as  we  use  in  the  office,  those  are  all 
purchased  through  the  State  Board  of  Auditors— all  of  that  small 
stuff. 

Mr.  Thompson:  How  do  you  let  contracts  for  your  various  classes  of 
work? 

Mr.  Rogers:  The  roads  and  bridges  are  practically  in  the  same  class. 
We  advertise  them  in  papers  in  and  out  of  the  state,  if  they  are  very 
large  contracts.  For  small  work  we  found  that  that  hardly  was 
profitable.  We  have  a  list  of  bridge  contractors — sixty  or  more,  and 
we  circularize  them  direct  everytime  there  is  an  advertisement  pub- 
lished so  we  know  they  see  it. 

Mr.  Thompson :     Where  are  those  contracts  let  ? 

Mr.  Rogers :     They  are  let  here  at  the  office  to  the  lowest  bidder. 

Mr.  Thompson :  Do  you  think  that  is  more  economical  for  the  people  of 
the  state  than  to  let  them  in  the  community  ? 

Mr.  Rogers :  I  think  so.  We  are  getting  a  large  number  of  bids  and 
find  that  comparatively  few  men  who  bid  will  take  the  pains  to  come. 
We  assisted  Ottawa  County  in  letting  a  contract  for  that  big  bridge ; 
it  was  advertised  as  usual,  also  twenty-five  or  thirty  bidders  came 
in,  but  a  firm  from  Joliet,  Illinois,  the  Joliet  Bridge  and  Iron  Com- 
pany, who  mailed  their  bid,  got  it,  as  they  were  below  any  represen- 
tative on  the  ground. 

Mr.  Thompson :  Going  back  to  the  scope  of  this  department.  It  is  your 
thought  that  there  will  be  10,000  or  12,000  miles  of  road  completed 
in  Michigan  in  the  next  ten  years. 

Mr.  Rogers.     Yes,  sir. 


105 

Mr.  Thompson:  What  will  be  the  probable  expenditure  by  way  of 
rewards  on  those  10,000  or  12,000  miles  ? 

Mr.  Kogers:  More  than  f  1,000,000  a  year  during  that  period,  and  I 
think  we  are  fast  approaching  the  point  where  the  automobile  money 
will  practically  take  care  of  those  rewards. 

Mr.  Thompson:  What  will  be  the  capacity  of  this  department  as  to 
turning  out  road  work  for  the  next  few  years  ? 

Mr.  Kogers:  I  think  we  can  by  expanding  meet  any  emergency.  We 
think  we  are  organized  here  with  men  who  are  experienced  in  their 
lines  so  that  sufficient  help  can  be  gathered  in  to  handle  emergencies. 

Mr.  Thompson :  What  changes  in  the  handling  of  money  by  the  depart- 
ment would  you  suggest? 

Mr.  Kogers :  Well,  I  think  that  a  little  discretion  ought  to  be  affirma- 
tively shown  in  the  law  as  to  depositing  large  sums  of  money  with 
the  County  Treasurer. 

Mr.  Thompson :  Would  it  be  wise  to  have  all  the  money  go  through  the 
State  Treasurer's  office? 

Mr.  Rogers :  We  have  been  thinking  of  that  some  and  it  has  some  very 
desirable  factors,  and  we  have  not  been  able  to  discover  very  many 
objections  to  it.  The  bonds  could  then  be  payable  at  the  office  of  the 
State  Treasurer,  although  certain  bonding  companies  have  ventured 
the  statement  that  these  bonds  would  all  market  better  if  they  were 
payable  in  New  York  City? 

Mr.  Smith:  Don't  you  believe  that  if  these  bonds  were  payable  at  the 
State  Treasury  and  the  money  was  all  handled  through  that  office, 
that  it  would  put  them  in  a  greater  financial  light  and  possibly 
reduce  the  rate  of  interest? 

Mr.  Kogers :  I  think  it  would  look  better  to  the  people  of  the  State  of 
Michigan  and  be  handy  for  this  department;  it  would  relieve  us  of 
attention  to  that  matter.  It  would  very  much  simplify  and  safe- 
guard the  whole  thing. 

Mr.  Thompson:  Do  you  have  some  employe  connected  with  your  office 
who  pays  particular  attention  to  the  financial  matters  of  the  depart- 
ment? 

Mr.  Kogers :     Our  bookkeeper  and  assistant. 

Mr.  Thompson :  Are  these  bonds  certified  to  in  any  case,  that  is  except 
your  signature? 

Mr.  Rogers:  Some  of  the  bonds  sold  to  F.  C.  Hayler  Company;  they 
wanted  some  county  official's  name  to  appear  on  them,  and  we  finally 
induced  them  to  take  Mr.  Belknap's  name  as  Special  Deputy,  in  addi- 
tion to  my  own. 

Mr.  Thompson:  Do  you  have  proceedings  certified  to  by  the  Attorney 
General? 

Mr.  Rogers :  No ;  the  Attorney  General  has  spent  a  great  deal  of  time 
on  this  act,  but  we  have  not  asked  him  to  go  through  the  proceedings 
of  any  road  except  to  get  us  started. 

Mr.  Thompson :     Would  it  not  be  a  service  to  the  people  of  the  state  to 
have  the  Attorney  General  certify  as  to  their  validity  in  every  case? 
Mr.  Rogers  :     It  might  have  a  tendency  to. 
Mr.  Thompson:     What  is   going  to  be  the  effect  of  the  war  on  your 

department  ? 
Mr.  Rogers:     In  the  first  place  we  are  losing  men.     We  have  sixteen 


106 

stars  in  our  service  flag  now  and  one  more  to  put  up,  and  undoubt- 
edly more  to  follow.  We  are  having  to  fill  their  places  with  men  of 
less  experience  and  this  year  it  was  impossible,  after  school  closed, 
to  get  a  man  from  the  University.  For  the  first  time  in  the  history 
of  the  department,  we  have  taken  men  from  out  of  the  state,  from 
other  institutions,  and  we  had  to  fill  up  with  under-graduates,  a 
class  we  would  have  passed  by  to  some  extent  a  year  ago.  Previous 
to  this  we  have  been  able  to  take  University  men  during  the  summer, 
and  give  them  vacation  work. 

Mr.  Thompson :     What  will  be  your  policy  during  the  war  ? 

Mr.  Rogers;  Our  policy  during  the  war  will  be  to  continue  work  as 
far  as  possible,  especially  on  important  trunk  line  roads.  We  are 
going  to  do  all  we  can  to  encourage  that  sort  of  road  building. 

Mr.  Thompson:     Do  you  rent  some  buildings  around  the  state? 

Mr.  Rogers:  We  rent  one  building  at  Cadillac  at  $8.00  per  month. 
Our  district  engineers,  other  than  that,  are  using  one  room  in  their 
homes  for  an  office.  They  are  in  and  out  and  have  found  that  a 
better  way  and  more  convenient.  We  are  not  trying  to  create 
branch  departments. 

Mr.  Thompson  :     How  do  you  buy  your  supplies  ? 

Mr.  Rogers :     Through  the  Board  of  Auditors  on  their  contract. 

Mr.  Hinkley:     What  is  the  situation  on  the  Seney  Road? 

Mr.  Rogers :  The  situation  on  the  Seney  Road  is  this :  we  have  a  letter 
from  the  Attorney  General  directing  that,  since  that  road  was 
ordered  built,  it  is  our  duty  to  complete  it,  and  we  have  been  grading, 
and  in  fact,  have  graded  to  the  county  line,  and  are  expecting  to 
build  a  road  between  the  end  of  the  stone  road  and  the  county  line. 

Mr.  Hinkley:  How  much  do  you  anticipate  it  will  take  to  finish  this 
road? 

Mr.  Rogers :  As  we  are  planning  it  now,  one  and  two-thirds  miles  more, 
and  the  cost  probably  will  be  $4,000  or  $5,000  a  mile. 

Mr.  Hinkley:  As  I  understand  the  situation,  the  legislature  refused  to 
appropriate  money  to  finish  this  road,  and  on  instructions  from  the 
Attorney  General,  you  have,  or  are,  finishing  it,  anyway. 

Mr.  Rogers :  That  is  about  the  situation.  We  are  building  it  as  cheap 
as  we  can  to  get  to  the  county  line. 


BOARD  OF  STATE  AUDITORS 

Mr.  Lord:  You  are  a  member  of  the  Board  of  State  Auditors,  Mr. 
Odell? 

Mr.  Odell:     Yes,  sir. 

Mr.  Lord :  And  being  a  member,  you  are  quite  familiar  with  the  activi- 
ties of  the  Board  of  State  Auditors? 

Mr.  Odell :  I  have  only  been  a  member  of  the  board  since  the  first  of  the 
year  and,  on  account  of  the  work  in  my  own  office  and  the  number  of 
boards  I  am  on,  I  have  not  been  able  to  devote  much  time  to  this 
work.  It  is  safe  for  me  to  say  that  we  can  depend  on  the  Secretary 
to  give  you  the  information  you  desire. 

Mr/ Lord:  Would  you  want  to  state  in  a  general  way  what  the  powers 
of  the  Board  of  Auditors  are,  and  what  their  various  activities  are. 
or  would  you  prefer  to  have  the  Secretary  make  that  statement? 


107 

Mr.  Odell :     I  would  prefer  to  have  the  Secretary  make  the  statement. 

Mr.  Lord:  Very  well,  Mr.  Mathews,  will  you  outline  to  the  commis- 
sion, as  briefly  as  possible,  the  various  activities  of  the  Board  of 
State  Auditors? 

Mr.  Mathews:  In  a  general  way,  the  board  has  charge  of  the  letting 
of  contracts  for  printing,  binding  and  stationery  and  the  purchase  of 
stationery  for  the  several  departments ;  also  the  ordering  of  the 
printing  and  binding  for  the  several  departments,  which  is  all  done 
on  requisition  from  the  departments.  After  the  printing  is  done  the 
printer  sends  his  bill  to  the  Board  of  State  Auditors,  together  with 
samples  of  the  printing  and  binding.  All  printing  and  binding  is 
let  by  contract  under  certain  items,  one  item  covering  one  kind  and 
one  item  another  kind,  and  it  is  all  classified  and  billed  to  us  under 
the  certain  item.  It  is  our  duty  to  take  those  samples,  which  accom- 
pany the  bill  from  the  printer,  and  see  that  they  conform  with  con- 
tract samples  on  file  downstairs.  In  case  they  are  not  correct,  it  is 
our  duty  to  correct  them.  We  also  give  the  proper  item  number  and 
get  the  bill  ready  for  the  Board  of  Auditors  to  pass  upon  at  their 
next  board  meeting.  The  books  come  in  what  we  call  "dummy" 
forms.  We  go  through  the  dummies  and  check  up,  page  by  page,  to 
see  if  the  composition  is  charged  correctly,  some  being  single  prices, 
some  double  price,  etc.  Then,  in  the  "job"  work,  for  instance,  here  is 
a  job  of  printing  charged  to  "22."  On  looking  this  over  we  changed  it 
and  charged  it  to  "20."  The  binding  works  out  similar  to  that.  It 
is  done  under  contract  as  well  as  the  printing. 

Mr.  Lord:     Do  you  advertise  for  bids  on  those  contracts? 

Mr.  Mathews :  Yes,  sir.  That  is  required  by  Act  12,  Public  Acts  of  1903. 
We  have  to  advertise  for  six  weeks  in  three  daily  papers. 

Mr.  Lord:  Are  the  contracts  usually  let  to  printers  who  are  residents 
of  the  state  or  to  outside  parties? 

Mr.  Mathews :     Usually  to  residents  of  the  state. 

Mr.  Lord :  Do  you  always  let  to  the  lowest  bidder  or  do  you  reserve  the 
right  to  reject  any  bid? 

Mr.  Mathews :  We  reserve  the  right  to  reject  any  bid  or  any  part  of  anj 
bid. 

Mr.  Lord :  For  what  reasons  usually  do  vou  reject  bids,  irresponsi 
bility? 

Mr.  Mathews :  No,  I  don't  know  as  we  have  ever  rejected  on  that  ground. 
We  usually  let  it  to  the  lowest  bidder  unless  there  is  something  in 
connection  with  the  work  that  would  make  it  impracticable. 

Mr.  Lord:  Now  you  can  go  ahead  and  tell  us  about  the  rest  of  your 
activities. 

Mr.  Mathews:  While  we  are  on  this  printing  proposition  I  might  say 
that  departments  send  in  to  us  for  their  needs  different  blanks,  etc. ; 
and  we  have  a  system  whereby  we  keep  a  duplicate  of  what  we  send 
just  as  soon  as  the  job  is  bilied  to  us,  and  when  paid  it  is  a  check 
against  duplicate  payment. 

Mr.  Lord:  In  letting  your  contracts  for  state  printing,  do  you  provide 
for  any  forfeitures  or  penalty  of  any  kind  where  delivery  is  not  made 
at  the  proper  time? 

Mr.  Mathews:     Yes,  sir;  that  is  in  the  contract. 

Mr.  Lord :     Do  vou  ever  enforce  that  contract  condition  ? 


108 

Mr.  Mathews:  We  never  have,  although  in  our  contract  for  letting 
printing  it  says,  "All  work  done  under  this  contract  is  to  be  com- 
menced immediately  upon  delivery  of  copies  and  is  to  be  carried 
forward  to  completion  promptly  and  without  delay,  and  all  work 
done  hereunder  is  to  have  preference  over  any  work  from  other 
sources  to  be  performed  by  contract.  The  right  is  reserved  by  the 
state,  in  case  of  any  default  of  this  contract,  to  have  any  of  the  work 
covered  by  this  contract  performed  by  parties  other  than  certain 
contractors,  the  cost  of  doing  same,  if  over  and  above  the  contract 
price,  to  be  borne  by  said  contractor." 

Mr.  Lord :  Have  you  ever  taken  advantage  of  that  when  there  has  been 
a  delay  in  getting  the  stuff  here? 

Mr.  Mathews:     I  don't  recall  that  we  ever  have. 

Mr.  Lord:  Don't  you  think  there  should  be  legislation  of  some  kind 
directing  you  to  enforce  the  terms  of  such  contracts? 

Mr.  Mathews:  The  state  reserves  the  right  to  annul  the  contract,  if 
there  should  be  a  failure  at  any  time  to  perform  any  of  the  specifica- 
tions in  the  contract. 

Mr.  Lord :  Don't  you  know  as  a  fact,  Mr.  Mathews,  that'  the  state  printer 
oftentimes  does  do  private  work  and  allows  the  state  printing  to 
wait  until  he  gets  the  private  work  done?  Those  charges  have  been 
made  and  never  have  been  denied  by  the  state  printer. 

Mr.  Mathews :  We  attempt  to  take  care  of  that  by  requiring  our  work  to 
have  preference  over  any  other. 

Mr.  Lord :  Yes,  but  that  don't  do  it.  The  fact  is  that  the  reports,  laws, 
etc.,  printed  by  the  state  are  usually  delayed  to  such  an  extent  that 
they  are  not  of  much  value  to  the  people  of  the  state.  That  is  not 
the  fault  of  the  state  departments,  but  of  the  state  printer,  and  there 
should  be  some  way  to  jack  him  up. 

Mr.  Odell :     What  reason  does  the  state  printer  give  for  these  delays? 

Mr.  Mathews:  All  kinds  of  excuses.  Sometimes  they  claim  they  have 
been  held  up  for  six  weeks  on  proof,  etc. 

Mr.  Lord :     Now,  Mr.  Mathews,  you  may  proceed. 

Mr.  Mathews :  Bills  come  to  us  from  the  printer  in  duplicate.  The  orig- 
inal goes  to  the  Auditor  General  and  we  keep  the  duplicate.  Then 
after  the  board  meeting  and  after  these  have  been  allowed,  we  post 
them  to  proper  item  number.  We  keep  a  card  system  and  on  those 
cards  we  keep  the  quantities  that  are  printed  for  the  two-year  period. 
Then,  when  we  are  letting  the  new  contract,  we  use  these  cards  as  a 
basis  to  work  on.  We  give  a  record  of  these  quantities  to  the  bidder 
for  a  guide. 

Mr.  Lord:  Is  the  original  copy  given  to  the  Auditor  General  for  the 
purpose  of  being  a  guide  for  him  to  draw  his  warrant  for  payment? 

Mr.  Mathews:  Yes.  Of  course,  we  approve  them  first  and  audit  them. 
The  record  of  stationery  is  kept  practically  in  the  same  way.  We 
keep  a  record  as  to  what  kind  of  stationery  and  the  quantity  that  is 
bought.  This  time  it  will  be  for  a  one-year  period,  as  we  let  the  con- 
tract for  stationery  only  for  one  year,  on  account  of  the  unsettled 
condition  of  the  market. 

Mr.  Lord :  In  the  selection  of  stationery,  the  kind  of  paper  you  use,  etc., 
do  you  have  the  last  say  as  to  what  the  quality  of  paper  shall  be,  or 
do  you  refer  that  to  the  department  heads? 


109 

Mr.  Mathews:  We  really  have  the  last  .say.  Sometimes  a  request  is 
silent  as  to  the  kind  of  paper.  Sometimes  they  request  some  special 
kind  of  paper  and,  if  we  consider  that  kind  impracticable,  we  usually 
take  the  matter  up  with  the  department  head  and  ask  if  some  other 
kind  wouldn't  be  satisfactory. 

Mr.  Lord:     Who  buys  the  paper? 

VIr.  Mathews :     The  Board  of  Auditors  orders  it. 

Mr.  Lord  :     Is  it  bought  under  contract  ? 

Mr.  Mathews:  Yes  sir.  After  the  contract  is  let,  either  for  printing, 
binding  or  for  stationery,  we  get  out  these  little  pamphlets,  which 
show  the  contract  price  for  each  item.  Some  kinds  of  paper  we  buy 
by  the  ream ;  anywhere  from  fifty  to  one  hundred  reams,  or  maybe 
more.  Book  paper  we  buy  in  carload  lots. 

Mr.  Lord:     Do  you  buy  direct  from  the  manufacturer? 

Mr.  Mathews :  No,  we  buy  on  contract.  For  instance,  the  Birmingham, 
Seaman  &  Patrick  Company  have  the  contract  for  M.  F.  paper. 

Mr.  Lord:  What  record  do  you  keep  of  your  stationery,  after  it  is 
received  ? 

VIr.  Mathews  :  We  use  the  card  system,  similar  to  the  system  of  printing 
and  binding.  It  shows  the  quantity  of  stationery,  number  of  pencils, 
ink,  pens,  inkwells,  etc.,  so  that  we  can  tell  how  much  has  been 
bought  during  the  one-year  period.  Those  are  supplied  to  prospective 
bidders,  so  that  they  will  know  what  we  are  using. 

Mr.  Lord:     Do  they  all  have  to  submit  samples  when  they  submit  bids? 

Mr.  Mathews :  Yes,  sir.  We  get  out  specifications  similar  to  the  others 
just  shown,  and  they  bid  on  different  kinds  of  paper.  For  instance, 
we  might  call  for  ledger  paper  and  one  might  bid  on  United  States 
ledger,  another  on  Weston's  ledger,  etc.,  but  they  submit  samples  and 
quote  prices. 

Mr.  Lord :  Does  the  state  get  any  discount  on  purchases  of  different 
paper,  or  is  it  net  in  the  contract? 

Mr.  Mathews :  It  is  net.  The  bidding  on  stationery  has  been  quite  brisk 
and  the  prices  have  been  considerably  lower  than  commercial  prices 
have  been. 

Mr.  Lord:  On  your  stationery  items,  such  as  pencils,  pens,  ink,  etc.,  do 
you  purchase  by  contract  or  do  you  buy  from  local  people? 

Mr.  Mathews :     We  buy  very  little  through  local  people. 

Mr.  Lord:  Can  you  tell  us  approximately  the  aggregate  for  the  vear? 
Is  it  f  1,000.00? 

Mr.  Mathews:     No,  it  would  hardly  amount  to  |500.00. 

Mr.  Lord:     So  that  practically  everything  is  under  contract? 

Mr.  Mathews:  Yes,  everything  is  under  contract.  Occasionally  new 
things  come  up  that  have  not  been  used  before  and  are  not  in  the 
contract.  In  those  cases,  we  sometimes  have  to  buy  locally. 

Mr.  Lord :  Does  the  Board  of  State  Auditors  permit  the  executive  head 
of  any  department,  or  anybody  else  in  the  state's  service,  to  purchase 
any  articles  for  use  in  that  department? 

Mr.  Mathews :     We  never  permit  them  to  buy,  but  sometimes  they  do  it. 

Mr.  Lord :     Then  what  do  you  do  ?     Do  you  give  them  a  scolding  ? 

Mr.  Mathews:     Yes. 

Mr.  Lord :     Do  they  ever  repeat  ? 


110 

Mr.  Mathews:  No,  they  do  not  very  often  repeat.  They  are  better 
about  sending  in  requisitions  than  they  used  to  be. 

Mr.  Lord:  Don't  you  think  that  it  would  be  a  good  plan  to  make  the 
executive  head  of  a  department  pay,  out  of  his  own  pocket,  for 
materials  not  bought  on  requisition? 

Mr.  Mathews :     It  might  be.     We  have  made  threats  to  that  effect. 

Mr.  Lord:  Isn't  it  a  fact  that  there  is  a  door  left  open  for  them  to 
make  purchases  of  this  kind? 

Mr.  Mathews  :     It  is  very  rare  now  ;  not  as  much  as  it  used  to  be. 

Mr.  Lord:     Has  it  been  lessened  by  action  of  the  Board  of  Auditors? 

Mr.  Mathews:  Yes;  when  we  don't  find  a  requisition  for  the  articles 
billed,  we  call  them  up  and  tell  them  as  a  protection  against  dupli- 
cate bills,  etc.,  and  it  is  getting  so  that  bills  don't  come  that  way  as 
much  as  they  used  to. 

Mr.  Lord:  A  system  of  correct  business  that  isn't  lived  up  to  is  worse 
than  no  system  at  all.  Mr.  Odell,  as  a  member  of  the  Board  of 
Auditors,  and  I  think  I  speak  for  the  Commission,  we  would  suggest 
that  the  board  refuse  to  audit  any  claims  for  purchases  made  by  any 
official  of  the  state  government,  where  a  requisition  has  not  been 
submitted,  and  that  requisitions  be  approved  by  the  Board  of 
Auditors.  That  would  be  correct  business. 

Mr.  Mathews:  A  year  and  a  half  ago  we  notified  every  department  that 
they  must  send  in  requisitions  or  we  would  not  audit  their  claims. 

Mr.  Lord:     Have  they  lived  up  to  this  requirement  since  that  time? 

Mr.  Mathews :  They  have  been  a  good  deal  better  since  that.  One  duty 
of  the  Board  of  Auditors  is  to  audit  claims  against  the  state.  There 
are  certain  classes  of  claims  that  go  to  the  Auditor  General  and 
some  to  the  Board  of  Auditors  to  be  audited. 

Mr.  Lord:  Can  you  tell  us  in  the  aggregate  how  many  classes  of  claims 
are  audited  by  the  Board  of  Auditors  and  how  many  are  audited  by 
the  Auditor  General? 

Mr.  Mathews :  I  couldn't  say  as  to  those  audited  by  the  Auditor  Gen- 
eral. There  are  probably  thirty  different  classes  audited  by  this 
board.  That  is,  we  probably  have  thirty  departments  whose  claims 
come  here.  Perhaps,  the  same  class  of  claims  would  go  to  the 
Auditor  General  as  come  here.  For  instance,  there  are  certain 
board  members'  traveling  expenses  which  go  to  the  Auditor  General, 
and  some  other  board  members'  traveling  expenses  come  here. 

Mr.  Lord :  Isn't  it  a  fact  that,  in  several  departments,  the  auditing  of 
the  costs  of  that  department  is  done  both  by  the  Board  of  Auditors 
and  by  the  Auditor  General?  Put  it  in  this  way.  The  department 
of  the  Board  of  Auditors  audits  the  accounts  for  salaries  of  a  certain 
department  or  commission,  and  the  Auditor  General  audits  the 
accounts  for  traveling  expenses  of  the  same  department.  Do  you 
think  it  is  the  proper  way  to  audit  state  accounts  ? 

Mr.  Mathews:  I  think  it  ought  to  go  to  one  department;  but  I  think 
the  worst  fault  is  that  similar  department  claims  come  here  to  those 
which  go  to  the  Auditor  General.  For  illustration,  the  State  Board 
of  Corrections  and  Charities  used  to  send  their  bills  almost  entirely 
to  the  Auditor  General.  Some  of  the  later  legislation  provides  for 
child-caring  institutions,  etc.,  and  it  provides  that  those  expenses 
shall  be  paid  from  the  general  fund.  The  expenses  authorized  by 


Ill 

early  legislation  go  to  the  Auditor  General  and  anything  authorized 
by  later  legislation  comes  here.  We  have  to  audit  claims  that  come 
under  the  general  fund.  The  claims  under  appropriations  go  tcr  the 
Auditor  General. 

T.  Lord :  Mr.  Mathews,  those  things  are  not  only  wrong  but  they  neces- 
sitate additional  bookkeeping,  don't  they? 

Mr.  Mathews:    Well,  I  don't  know  how  much  additional  bookkeeping. 

Mr.  Lord:  Well,  they  have  to  keep  an  account  of  it  in  the  Auditor 
General's  office,  don't  they? 

Mr.  Mathews:  Yes.  They  have  to  keep  two  funds  and  we  keep  two 
funds.  We  keep  two  postage  accounts  for  the  Board  of  Corrections 
and  Charities.  The  postage  for  the  Board  of  Corrections  and  Chari- 
ties would  not  have  to  come  to  this  board,  but  they  wanted  it  to 
come  here. 

Mr.  Lord:  This  naturally  necessitates  a  greater  amount  of  labor  and 
greater  cost  to  the  state? 

Mr.  Mathews :    Yes,  sir ;  I  think  it  does. 

'r.  Lord:  Is  there  any  conflict  of  laws  in  regard  to  the  auditing  of 
claims  as  done  by  this  department  with  that  done  by  the  Auditor 
General's  Department?  Any  similarity  of  statutory  provision 
which  directs  the  Auditor  General  to  audit  all  claims  and  accounts, 
and  any  statutory  provision  which  directs  the  Board  of  Auditors  to 
audit  the  same  claims  and  accounts? 

Mr.  Mathews :    No,  I  don't  know  that  there  is. 

(Section  114-124.  Chapter  12,  "Compiled  Laws  of  1915,"  Audi- 
tor General.  Also  Sections  148-159,  Board  of  State  Auditors. 
These  sections  were  referred  to  and  discussed  by  the  Commis- 
sion and  Messrs.  Odell  and  Mathews.) 

Mr.  Mathews :  There  is  one  other  duty  which  the  Board  of  Auditors  has 
that  I  am  not  sure  will  continue.  In  the  past  we  have  checked  up 
the  claims  for  the  Oil  Inspector  and  I  am  not  sure  but  what  the  act 
passed  in  1917  will  require  him  to  turn  in  all  his  fees  to  the  State 
Treasury  and  put  through  vouchers  for  his  expenses.  I  called  the 
attention  of  the  board  to  this  at  our  last  meeting  and  was  directed 
to  get  an  opinion  from  the  Attorney  General  in  regard  to  the  matter. 
But  up  to  the  present  time  we  have  checked  up  all  Oil  Inspection 
accounts. 

Mr.  Lord :    You  mean  their  claims  for  expenses  ? 

Mr.  Mathews:  Yes.  Under  the  present  system  the  Oil  Inspectors  col- 
lect for  oil  inspection  and  then  their  expenses  are  deducted  from  the 
fees  received,  and  any  balance  remaining  is  turned  over  to  the  state. 

Mr.  Lord :  From  the  fees  that  the  Oil  Inspectors  collect,  they  pay  their 
own  expenses  and  then  turn  anything  that  is  left  into  the  state 
treasury.  Is  that  it? 

Mr.  Mathews :     That  is  the  way  it  has  been  done. 

Mr.  Lord:  You  checked  simply  the  amounts  according  to  the  report 
sent  to  you?  You  don't  know  whether  they  have  made  a  correct 
report  ? 

Mr.  Mathews :  Well,  they  are  sworn  reports,  and,  furthermore,  there  is 
a  system  of  receipts  whereby  each  receipt  is  numbered  and  has  to  be 
accounted  for  to  the  Oil  Inspector.  We  check  up  the  reports  to  see 
that  the  railroad  fares  are  correct  and  to  see  that  no  claims  that 


112 

should  not  be  included  are  shown.     For  instance,  one  man  had  in  his 

report  a  charge  for  telephone  in  his  house.     Of  course,  we  cut  that 

out. 
Mr.  Lord:     Do  they  turn  in  the  balance  in  their  hands  every  month, 

when  they  make  their  report  ? 
Mr.  Mathews:     They  turn  it  over  to  the  Oil  Inspector  and  he  turns  it 

over  to  the  State  Treasury  every  three  months.     It  used  to  be  at  the 

end  of  every  year,  but  we  took  it  up  with  him  a  little  while  age 

and  requested  that  he  make  reports  quarterly. 
Mr.  Lord :     Mr.  Odell,  can  you  tell  us  approximately  how  much  the  Oi 

Inspector  collects,  or  did  collect  last  year? 

Mr.  Odell :     I  can't  tell  you  off-hand,  but  I  will  get  that  for  you. 
Mr.  Mathews:     I  think  that,  in  the  course  of  a  year,  they  turn  in  approx 

imately  $30,000  over  and  above  their  expenses. 
Mr.  Lord :     Are  there  any  other  departments  which  conduct  business  ir 

that  way? 

Mr.  Mathews:     None  that  come  in  this  office. 
Mr.  Lord:     Mr.  Odell,  are  all  the  fees  collected  by  departments,  com 

missions  and  boards,  now  turned  into  the  State  Treasury? 
Mr.  Odell:     It  is  my  impression  that  under  the  1917  act,  they  are. 

don't  know  of  any  that  are  not. 
Mr.  Mathews:     The  Oil  Inspector's  year  is  a  calendar  year.     Fees  col 

lected  for  the  first  quarter  of  this  year  were  $11,603.41.     For  the 

second  quarter,  $8,491.03,  for  the  third,  the  last  quarter  which  has 

been  reported,  $10,093.31,  making  for  the  three  quarters,  so  far  this 

year,  $30,287.75.    In  auditing  claims,  the  board  has  two  meetings  ; 

month.     The  law  requires  them  to  meet  on  the  last   Wednesday  o 

every  month  for  auditing  claims,  but  we  find  there  is  too  much  to  d( 

at  that  time.    We  meet  the  day  before  that  day.  and  also  meet  two 

weeks  before  those  days  for  two  days.    Those  are  the  regular  days  foi 

the  meeting  of  the  board. 

Mr.  Lord:     Are  bills  usually  checked  up  before  the  board  meets? 
Mr.  Mathews :     Yes.    Our  office  force  goes  through  them  and  checks  them 

up  to  see  if  the  railroad  fares  are  correct  and  that  no  excessive  hote 

charges  are  included. 
Mr.  Lord:     What  are  your  rules  in  regard  to  expenses?    Have  you  any 

limitations  ? 
Mr.  Mathews:     The  board  allows,  not  to  exceed,  $5.00  a  day  outside  of 

the  state,  and  in  Detroit  and  Grand  Rapids.    Then  they  allow,  not  to 

exceed,  $4.00  a  day  in  Battle  Creek,  Kalamazoo,  Flint,  Bay  City,  Sagi- 

naw,  Jackson,  Lansing,  Port  Huron  and  Muskegon,  and  not  to  exceed 

$3.50  a  day  in  other  parts  of  the  state. 
Mr.  Lord:     The  Board  of  Auditors  is  also  custodian   of  considerable 

state  property,  is  it  not? 
Mr.  Mathews :    Yes.    In  the  absence  of  the  legislature  we  are  custodian 

of  the  property  used  by  them  and  of  the  state  capitol  grounds.    There 

are  also  two  blocks  here  in  the  city  that  we  have  jurisdiction  over; 

these  blocks  being  owned  by  the  state. 
Mr.  Lord:     What  authority  have  you  over  the  employes  of  the  Capitol, 

such  as  janitors,  etc.? 
Mr.  Mathews:     We  place  these  janitors  usually  on  recommendation  of 

the  heads  of  the  departments.     The  board  did  not  feel  that  they 


113 

wanted  to  force  an  objectionable  janitor  on  any  department  so  they 
consult  with  the  department  head  before  the  formal  appointment  is 
made. 

Mr.  Lord:     Under  whose  direct  supervision  are  those  employes? 

Mr.  Mathews :     F.  C.  Bennett,  Superintendent  of  the  Capitol. 

Mr.  Lord :  Has  he  anything  to  do  with  engaging  the  services  of  these 
men? 

Mr.  Mathews:     No,  sir. 

Mr.  Lord:     Does  Mr.  Bennett  ever  make  reports  to  this  board? 

Mr.  Mathews:  He  makes  a  report  every  month  of  the  sale  of  old 
material,  such  as  cast-off  furniture,  waste  paper,  etc.  Things  of 
that  nature,  the  Board  of  Auditors  authorize  him  to  sell  where 
sale  would  not  exceed  $  100.00.  If  the  price  is  more  than  that, 
it  is  called  to  the  attention  of  the  board  first.  Mr.  Bennett  has  a 
system  of  receipts  made  in  triplicate  by  which  he  handles  these  mat- 
ters. He  gives  one  receipt  to  the  party  who  makes  the  purchase, 
sends  one  receipt  to  the  Board  of  Auditors  with  his  report,  and 
keeps  one  in  his  own  book.  Every  one  of  those  receipts  is  numbered, 
consecutively,  so  that  it  has  to  be  accounted  for.  It  is  a  very  good 
system  and  I  believe  is  accurate.  Every  month  he  makes  a  report  on 
all  sales.  He  makes  a  report  at  the  first  meeting  of  the  Board  of 
Auditors  for  the  sales  made  the  preceding  month. 

Mr.  Lord :     What  disposition  is  made  of  proceeds  from  such  sales? 

Mr.  Mathews :     They  are  turned  over  to  the  State  Treasurer. 

Mr.  Lord :  Does  he  turn  over  the  money  himself  to  the  State  Treasurer, 
or  do  you  ? 

Mr.  Mathews:     He  turns  it  over  himself  and  files  his  receipt  with  us. 

Mr.  Lord :  Now,  Mr.  Mathews,  will  you  tell  us  about  the  system  of  pur- 
chasing furniture,  equipment,  etc.,  for  the  various  offices,  how  it  is 
done  and  who  does  it? 

Mr.  Mathews:  Our  system  is  that  if  a  department  is  in  need  of  any 
furniture,  it  sends  in  a  requisition  to  the  Board  of  Auditors  and  I 
refer  it  to  Mr.  Bennett.  Mr.  Bennett  takes  it  up  with  the  depart- 
ment and,  if  it  is  a  carpet  that  it  is  in  immediate  need  of,  he  would 
arrange  to  go  and  make  the  selection,  O.  K.  the  requisition,  and  put 
on  the  dealer's  name.  We  would  then  write  an  order  for  it. 

Mr.  Lord  :  Has  there  been  any  resolution,  or  order,  passed  by  the  Board 
of  Auditors  giving  Mr.  Bennett  this  authority? 

Mr.  Mathews :  I  don't  know  of  any  law  that  would  require  Mr.  Bennett 
to  take  a  part  in  the  purchase  of  these  articles.  It  has  practically 
grown  up.  We  have  found  that  by  having  one  man  to  look  after  this 
work,  it  is  more  satisfactory.  He  becomes  accustomed  to  the  prices. 
Mr.  Bennett's  services  have  saved  the  state  a  great  deal  of  money  in 
these  matters. 

Mr.  Lord :     So  that  as  a  matter  of  fact,  the  furniture  is  usually  bought 

before  it  is  brought  to  the  attention  of  the  Board  of  Auditors? 
Mr.  Mathews :     Without  it  is  for  a  large  amount. 

Mr.  Lord:  Would  it  cause  the  department  ordering  the  furniture  any 
great  inconvenience  if  they  had  to  wait  two  weeks,  so  that  the 
board  could  pass  on  its  requisition? 

Mr.  Mathews :  Well,  in  a  great  many  cases  they  are  put  up  to  the  board, 
but  sometimes,  as  I  say,  after  a  requisition  comes  in  for  material, 


114 

which  the  department  is  in  immediate  need  of,  it  is  referred  to  Mr. 
Bennett.  For  instance,  if  a  requisition  comes  in  just  after  the  board 
meeting,  it  is  often  found  necessary  to  get  the  material  immediately. 
However,  where  I  think  that  the  department  can  wait  I  hold  up  the 
requisition  for  the  Board  of  Auditors  to  consider. 

Mr.  Lord:  How  much  furniture  and  office  equipment  has  the  State 
Board  of  Auditors  bought  during  the  last  year,  or  on  an  average 
for  the  last  two,  three,  or  four  years  ? 

Mr.  Mathews :     I  couldn't  tell. 

Mr.  Lord:  Has  the  board  bought  f  10,000  worth  in  the  last  three  or 
four  years? 

Mr.  Mathews :  Yes,  I  think  that  would  be  a  fair  estimate.  I  think  Mr. 
Bennett  keeps  a  record  of  every  order  and  the  cost  of  the  things 
ordered. 

Mr.  Lord:  So  that  the  department  head  really  makes  the  selection  of 
what  is  to  be  bought  and  the  order  for  it  is  turned  over  to  Mr.  Ben- 
nett to  make  the  purchase. 

Mr.  Mathews:  I  could  hardly  say  that;  Mr.  Bennett  is  supposed  to  go 
with  them  and  have  a  say  in  the  selection. 

Mr.  Lord :    If  he  thinks  it  is  too  costly,  can  he  turn  it  down  ? 

Mr.  Mathews :     Yes,  and  he  does  that  very  frequently. 

Mr.  Lord:  So  that,  really,  Mr.  Bennett  is  not  only  the  Superintendent 
of  the  Capitol  Grounds  and  Capitol,  but  is  also  the  purchasing  agent 
for  the  Board  of  State  Auditors. 

Mr.  Mathews:  Yes,  the  board  has  really  delegated  that  duty  to  him. 
You  might  call  him  that. 

Mr.  Lord :  Does  Mr.  Bennett  buy  the  coal  and  things  of  that  kind  that 
are  used  in  the  Capitol  ?  I  notice  by  the  paper  that  you  have  a  con- 
siderable quantity  of  coal  on  hand. 

Mr.  Mathews :  That  was  bought  by  the  Board  of  State  Auditors.  It 
was  like  this.  At  board  meeting  time  the  board  thought  best  to  have 
one  hundred  tons  of  coal  put  in  the  bunkers  and  they  told  Mr. 
Vaughan  to  have  Mr.  Hicks  of  St.  Johns  see  if  he  could  get  some  coal 
for  us.  I  saw  the  telegram  that  Mr.  Vaughan  sent  and  the  next  thing 
I  knew  the  coal  was  here. 

Mr.  Tompkins:    What  did  you  pay  for  that  coal? 

Mr.  Mathews:  I  don't  know.  I  know  what  the  freight  was,  but  not 
what  the  cost  at  the  mine  was. 

Mr.  Lord :  What  else  does  Mr.  Bennett  -do  under  authority  of  the  Board 
of  State  Auditors;  except  looking  after  janitors,  elevator  men,  etc., 
selling  of  old  furniture  and  the  purchasing  of  new.  Does  he  have  any 
other  duties? 

Mr.  Mathews:  Of  course,  there  are  some  of  the  janitors  that  are  hall 
janitors,  not  assigned  to  any  particular  department.  Those  are 
appointed  by  the  Board  of  Auditors  and  are  under  his  immediate 
supervision.  He  looks  after  the  elevator,  lights,  etc.,  and  the  upkeep 
of  the  building,  also  the  grounds,  flower  beds,  walks,  etc. 

Mr.  Lord:  If  a  department  wants  a  new  set  of  steel  filing  cases,  for 
instance,  who  purchases  them,  Mr.  Bennett? 

Mr.  Mathews:  It  is  usually  authorized  by  the  board  and  referred  to 
Mr.  Bennett  to  purchase. 

Mr.  Lord :    He  makes  purchases  of  all  such  equipment  so  that  he  really 


115 

purchases  a  large  part  of  equipment  for  the  offices  and  departments, 
doesn't  he? 

Mr.  Mathews:     Yes,  sir. 

Mr.  Lord:  Do  you  know  of  any  duplication  of  effort  on  the  part  of  the 
Board  of  State  Auditors  and  the  Auditor  General.  I  mean  actual, 
not  what  might  be  authorized  and  is  not  done? 

Mr.  Mathews:     I  don't  recall  anything. 

Mr.  Lord :  Is  there  any  compilation  of  claims,  bills  and  accounts,  or 
anything  at  all,  done  here  and  published,  and  which  is  also  published 
and  compiled  by  the  Auditor  General  ?  Do  you  know  of  any  duplica- 
tion in  that  respect? 

Mr.  Mathews :  I  don't  know  just  what  his  report  covers.  I  never  read 
it  only  as  I  have  referred  to  it.  Sometimes  we  put  a  claim  through 
under  one  department  head  and  it  goes  over  there  and  he  puts  it 
under  some  other  head. 

Mr.  Lord:     That  would  be  a  duplication,  would  it  not? 

Mr.  Mathews :  Yes,  that  is  a  duplication,  it  is  true.  Take,  for  instance, 
the  Attorney  General's  claims.  We  put  them  through  under  the 
department  head  of  "Attorney  General."  The  Auditor  General  puts, 
at  least,  part  of  them  through  under  the  head  of  "Costs  of  Suit." 

Mr.  Lord:  That  is  a  duplication  of  clerical  work  and  cost  of  printing 
which  would  include  the  paper,  etc.,  and  it  certainly  constitutes  a 
waste. 

Mr.  Mathews :     I  should  think  it  would. 

Mr.  Lord :  Duplication  of  work,  Mr  Mathews,  is  a  very  important  thing 
and  if  you  know  of  any  other  duplication,  other  than  that  just 
referred  to,  I  wish  you  would  tell  us  about  it. 

Mr.  Mathews :     I  can't  recall  any  off-hand. 

Mr.  Lord :  If  the  auditing  of  all  claims  of  every  kind  and  description 
was  placed  in  the  hands  of  the  State  Board  of  Auditors,  there  would 
be  no  danger  of  duplication  and  it  would  result  in  a  considerable 
saving  of  money,  would  it  not  ? 

Mr.  Mathews:     I  think  so. 

Mr.  Lord :  To  get  back  to  the  printing  again,  has  the  Board  of  Auditors 
at  any  time,  or  does  it  contemplate  doing  it  in  the  future,  regulate  the 
size  of  the  reports  issued  by  the  various  departments,  commissions, 
etc.?  Have  they  ever  undertaken  to  cut  down  unnecessary  detail  in 
the  reports? 
Mr.  Mathews:  I  don't  know  that  they  have.  There  are  certain  ones 

that  the  law  limits. 

Mr.  Lord :     Yes,  I  know,  but  very  few  of  them. 

Mr,  Mathews:  I  took  it  up  with  Mr.  Ellsworth  of  the  Insurance  Com- 
mission and  he  is  going  to  cut  his  down.  He  came  and  talked  with 
me  about  it  and  wanted  to  know  if  I  didn't  consider  it  would  be  just 
as  valuable  a  report  if  it  were  cut  down,  and  I  told  him  I  considered 
it  would  be  better. 

Mr.  Lord:  Could  not  the  Board  of  State  Auditors  stop  publication  of 
any  report  that  exceeded  in  size,  say  five  hundred  pages.  That  is, 
couldn't  the  board  limit  the  reports  to  that  number  of  pages  ?  Don't 
you  think  it  would  be  complied  with  ? 

Mr.  Mathews:  They  might  conform,  but  I  don't  know  that  the  law 
gives  that  authority  to  the  board.  If  that  was  to  be  done  they  would 


116 

have  to  begin  the  first  of  the  fiscal  year  to  keep  their  records 
accordingly. 

Mr.  Lord:  Have  you  ever  examined  these  reports,  or  has  the  Board  of 
Auditors  examined  them? 

Mr.  Mathews:     I  don't  know  as  they  have. 

Mr.  Lord:  You  know  as  a  fact,  Mr.  Ma  thews,  that  these  reports  contain 
a  lot  of  useless  detail? 

Mr.  Mathews:     Yes,  I  think  that  is  true. 

Mr.  Lord :     What  would  you  advise  being  done  to  remedy  that  condition? 

Mr.  Mathews:     That  is  a  pretty  hard  proposition. 

Mr.  Lord :  Would  you  advise  an  enactment  of  a  law  limiting  the  number 
of  pages  and  size  of  every  report  or  reports  of  each  department,  or 
would  you  advise  an  enactment  of  a  law  delegating  the  authority  to 
the  Board  of  State  Auditors  to  say  how  large  these  reports 
should  be? 

Mr.  Mathews:  I  believe  the  better  way  would  be  to  delegate  it  to  the 
board  and  have  them  take  it  up  with  the  department.  If  you 
limit  it  to  a  certain  number  of  pages,  there  might  be  something  come 
up  that  would  make  it  impracticable,  but  if  it  was  flexible  we  could 
use  our  judgment  in  cutting  out  what  was  not  necessary.  It  seems 
to  me  there  should  be  a  little  leeway  there. 

Mr.  Lord :  What  action  has  the  Board  of  Auditors  taken  in  the  matter 
of  cutting  down  the  number  of  these  reports? 

Mr.  Mathews:  I  take  it  up  with  the  heads  of  the  departments  and  ask 
them  if  they  can't  get  along  with  any  less  than  they  have  ordered. 

Mr.  Lord:  The  reason  I  asked  that  is  this.  We  have  had  correspondence 
with  various  County  Clerks  and  we  find  that,  in  at  least  one-half  of 
the  counties  of  the  state,  where  a  lot  of  the  reports,  documents,  etc., 
sent  out  by  the  state  have  been  sent,  they  have  been  sold  for  waste 
paper.  One  County  Clerk  reported  that  last  March  he  sold  two  tons 
that  had  been  lying  around  his  office.  It  seems  to  me  that  it  should 
be  the  duty  of  the  Board  of  State  Auditors  to  cut  the  number  of 
these  reports. 

Mr.  Mathews:  I  don't  know  what  kind  of  publication  they  refer  to.  In 
fact,  I  don't  know  how  the  different  departments  distribute  their 
publications.  We  never  have  more  than  five  hundred  of  our  reports 
printed.  We  turn  over  one  hundred  and  twenty-five  to  the  State 
Library,  fifty  to  the  Secretary  of  State ;  then  we  send  them  to  mem- 
bers of  the  legislature,  ex-members  of  the  board,  and  so  on.  We  don't 
send  any  to  County  Clerks. 

Mr.  Lord:  How  many  of  the  state  documents  and  reports  do  you  read 
yourself  ? 

Mr.  Mathews:  I  don't  have  time  to  read  them.  I  keep  them  here  for 
reference  as  samples  of  binding,  etc.,  but  I  don't  read  them. 

Mr.  Mathews:     I  think  that  if  they  were  condensed,  it  would  be  better. 

Mr.  Lord:  There  would  be  more  of  them  read,  and  there  would  be  a 
saving  in  cost  to  the  taxpayers  of  the  state. 

Mr.  Mathews :     Yes,  I  think  that  is  true. 

Mr.  Lord:  Has  the  board  established  any  standard  in  the  matter  of 
office  equipment  and  supplies  in  the  departments? 

Mr.  Mathews :     They  have  not  adopted  any  standard. 


117 

Mr.  Lord :     It  is  really  then  a  hit  and  miss,  proposition  as  far  as  pur- 
chase of  equipment  is  concerned. 
Mr.  Mathews :     They  have  been  starting  a  new  system  of  filing ;  that  is, 
when  cases  are  ordered,  they  have  bought  the  steel  cases  to  get  away 
from  fire,  etc.    Of  course,  some  of  the  departments  have  wood  filing 
cases. 
Mr.  Lord :     Do  you  keep  a  supply  room  where  you  keep  a  stock  of  such 

things  on  hand,  such  as  stationery, .etc.? 
Mr.  Mathews:     Yes,  sir. 
Mr.  Lord :     Where  is  it  located  ? 
Mr.  Mathews :  We  have  one  in  the  basement,  one  on  Ottawa  street,  and 

one  under  the  Capitol  National  Bank  Building. 
Mr.  Lord :     What  record  do  you  keep  of  those  stock  rooms  ? 
Mr.  Mathews:     Those  are  stock  rooms  for  paper  and  supplies,  adding 

machine  rolls,  etc. 
Mr.  Lord :     You  know  what  is  in  there,  don't  you  ? 
Mr.  Mathews  :     Yes,  sir. 

Mr.  Lord :     What  do  you  do  when  a  roll  of  paper  is  taken  out  ? 
Mr.  Mathews :     It  all  goes  out  on  requisition  and  is  posted  on  our  stock 

cards. 

Mr.  Lord :     Do  you  take  an  inventory  ? 
Mr.  Mathews :     Yes,  every  two  months. 
Mr.  Lord :     A  complete  inventory  of  everything  you  have  in  each  stock 

room? 

Mr.  Mathews  :     Yes,  sir. 
Mr.  Lord:     Who  takes  that  inventory? 

Mr.  Mathews :  -  Mr.  Benjamin  and  Mr.  Riley.     Nothing  goes  out  except 
on  requisition.    When  we  are  writing  an  order  for  printing,  we  figure 
up  the  paper  that  will  be  used  and  check  that  off  on  the  cards. 
Mr.  Lord:     What  inventory,  if  any,  do  you  take  of  the  equipment,  sup- 
plies, etc.,  in  the  different  departments;  of  these  different  supplies 
and  material  gotten  from  the  Board  of  Auditors  on  requisition? 
Mr.  Mathews :  We  take  an  inventory  of  that. 
Mr.  Lord:     How  often  do  you  take  the  inventory? 
Mr.  Mathews:     As  often  as  furniture  is  purchased.     For  instance,  if  a 
desk  is  purchased  for  the  Auditor  General,  after  it  is  ordered,  the 
duplicate  voucher  is  turned  over  to  Mr.  Benjamin.    He  goes  into  that 
department  and  puts  an  inventory  number  on  that  desk.  The  voucher 
is  then  turned  over  to  one  of  our  clerks,  and  she  enters  it  on  a  card 
showing  where  the  desk  is  located. 
Mr.  Lord  :     Do  you  have  anything  to  do  with  the  inventory  of  stationery, 

etc.,  in  the  different  departments  ? 
Mr.  Mathews :     There  is  none  taken  that  I  know  of. 
Mr.  Lord:     What  do  you  do  where  anything  is  transferred  from  one 

department  to  another? 

Mr.  Mathews:  When  we  catch  it,  we  can  show  it  on  the  cards.  That  is 
one  thing  that  is  rather  lame.  They  might  transfer  something  to 
another  department  or  turn  it  over  to  Mr.  Bennett  and  we  would  not 
know  it. 

Mr.  Lord:  Why  shouldn't  he  report  those  matters?  Do  you  think  that 
Mr.  Bennett  should  have  the  authority,  or  assume  the  authority,  to 


118 

approve  the  transfer  of  any  furniture,  without  the  Board  of  Auditors 
knowing  anything  about  it? 

Mr.  Mathews:     Lots  of  times  he  might  not  know  of  it. 

Mr.  Lord :  Has  the  executive  head  of  an  office  any  authority  to  dispose 
of  furniture  in  his  office? 

Mr.  Mathews :     Not  that  I  know  of. 

Mr.  Lord:  Then,  if  he  does  it,  it  is  irregular  or  illegal.  Is  this  done 
very  often? 

Mr.  Mathews :  Once  in  a  while.  We  occasionally  find  a  mix-up  on  type 
writers. 

Mr.  Lord :  Couldn't  you  adopt  a  system  here  whereby  a  complete  check 
could  be  made  on  such  transfers  from  one  department  to  another? 
If  you  don't  do  that,  how  do  you  know  you  have  all  the  equipment 
you  have  bought? 

Mr.  Mathews :     Don't  know  as  we  would  know. 

Mr.  Lord:  Would  it  not  be  wise  for  the  Board  of  State  Auditors  to 
adopt  a  system,  so  that  no  transferring  of  equipment  could  be  mad< 
unless  on  your  approval,  and  then  request  the  Superintendent  of  the 
Capitol  to  report  all  such  transfers? 

Mr.  Mathews :  I  don't  know.  It  would  be  rather  cumbersome  A  great 
many  times  a  chair  might  play  out  and  it  would  be  turned  over  to  th( 
Superintendent  of  the  Capitol  and  later  a  requisition  put  in  for 
same. 

Mr.  Lord:  But  he  should  be  required  to  keep  a  record  of  that  chair, 
and  the  last  of  every  month  report  to  the  Board  of  Auditors  on  these 
matters.  Unless  this  is  done,  I  do  not  see  how  you  can  get  a  correct 
inventory. 

Mr.  Mathews :  I  don't  think  the  inventory  is  very  accurate,  but  we  keep 
it  the  best  we  can. 

Mr.  Lord :  So  that  really  the  Board  of  State  Auditors,  being  custodian 
of  state  property,  does  not  know  what  it  has? 

Mr.  Mathews:  I  don't  know  as  we  would  be  the  custodian  in  the  dif- 
ferent departments. 

Mr.  Lord :     Who  would  be,  the  executive  heads  of  the  departments  ? 

Mr.  Mathews:     I  think  so. 

Mr.  Lord:  Why  do  you  take  an  inventory  in  the  departments  and 
number  the  articles  if  the  head  of  the  department  is  custodian?  If 
the  Board  of  Auditors  was  not  custodian  of  furniture  in  the  office,  it 
would  not  have  any  right  to  go  in  there  and  take  an  inventory. 

Mr.  Mathews :  We  would  not  take  inventory  unless  it  was  bought  from 
an  appropriation. 

Mr.  Lord:  Most  of  the  furniture  purchased  is  charged  to  the  general 
fund,  isn't  it? 

Mr.  Mathews :  Not  all  of  it.  All  the  furniture  for  the  Industrial  Acci- 
dent Board  is  charged  to  their  appropriation.  If  it  was  a  depart- 
ment like  the  Game,  Fish  and  Forestry  Department,  whose  claims 
go  direct  to  the  Auditor  General,  we  would  have  no  way  of  knowing 
about  the  purchases.  It  could  be  systematized  better  if  claims  all 
went  to  one  department. 

Speaking  about  having  somebody  to  turn  the  work  over  to,  calls  to 
my  mind  what  I  have  often  advocated  the  state  should  have.  We 
should  have  someone  when  a  question  arises  we  could  refer  it  to,  and 
have  him  investigate.  Take,  for  instance,  the  claims  of  County 


119 

Agents.  Sometimes  these  look  a  little  doubtful,  and  it  is  necessary 
to  write  back  and  ask  if  the  work  took  two  days  and  why,  etc.  Lots 
of  times  we  find  duplications  of  dates  and,  if  in  auditing  Hio~se 
claims,  we  have  a  suspicion  that  the  man  is  crooked,  we  really  have 
no  way  of  investigating.  If  he  is  crooked,  we  ought  to  find  it  out.  If 
we  had  a  sort  of  a  secret  service  man,  whom  we  could  refer  these 
matters  to,  I  believe  it  would  be  more  satisfactory. 

Mr.  Lord:  Mr.  Mathews,  do  you  know  of  anything  that  you  could  put 
in  here,  by  way  of  equipment,  that  would  increase  the  efficiency  of 
the  office  at  all? 

Mr.  Mathews :     I  don't  know  of  anything  in  our  department. 

Mr.  Thompson:  Do  you  know  of  anything  that  could  be  placed  in  any 
of  the  departments  that  would  increase  the  efficiency  of  the  working 
force  ? 

Mr.  Mathews :     I  don't  know  much  about  the  other  departments. 

Mr.  Lord:  So  that,  so  far  as  you  know,  you  have  everything  you  need 
by  way  of  equipment,  and  you  think  that  the  employes  are  all 
efficient? 

Mr.  Mathews:     I  think  so. 

Mr.  Lord:  Are  these  people  in  your  office  appointed  because  of  their 
qualifications  or  because  of  their  political  affiliation? 

Mr.  Mathews :     A  little  of  both,  I  believe. 

Mr.  Thompson :  I  notice  that  you  let  your  printing  for  so  many  thou- 
sand ems.  Would  it  help  the  state  if  you  had  a  further  classi- 
fication? 

Mr.  Mathews :     I  don't  think  so. 

Mr.  Thompson :  As  it  is,  all  printing  goes  to  one  firm  ? 

Mr.  Mathews :     On  our  former  contract ;  we  split  it  up  some. 

Mr.  Thompson :  What  was  your  experience  in  splitting  the  printing  up 
in  smaller  units? 

Mr.  Mathews :     It  was  not  satisfactory. 

Mr.  Thompson:     For  what  reason? 

Mr.  Mathews :  It  was  too  complicated.  When  a  job  comes  to  you,  it  is 
hard  to  know  just  what  item  that  comes  under.  For  instance,  the 
manuscript  is  liable  to  be  written  with  typewriter  and  it  is  hard  to 
know  what  item  it  will  come  under  when  printed.  Binding  is  a 
little  different.  You  can  split  that  up  better  than  printing. 

Mr.  Thompson :  Would  it  be  possible  to  split  it  up  so  that  the  institu- 
tion at  Kalamazoo  or  Adrian  could  bid  on  the  equivalent  of  one 
report  or  several  reports  ? 

Mr.  Mathews:  There  are  certain  items  that  could  be  bid  on.  For 
instance,  the  Bed  Book  or  Manual  is  an  item  by  itself.  Public  Acts 
is  an  item  by  itself.  Thev  would  have  to  pick  out  some  item  like 
that. 

Mr.  Thompson :     You  don't  find  it  advisable,  however,  to  divide  it  up? 

Mr.  Mathews :  In  the  last  bid  there  was  nothing  to  divide.  The  present 
contractor  was  the  lowest  bidder  on  all  items  in  printing. 

Mr.  Thompson:     How  many  other  bidders  were  there? 

Mr.  Mathews:     One  or  two. 

Mr.  Thompson :     Do  you  ever  have  any  bids  for  less  than  all  the  work  ? 

Mr.  Mathews:     Yes,  sir. 

Mr.  Thompson  :     Did  you  at  your  last  letting  ? 


120 

Mr.  Mathews:     I  don't  know  as  we  did. 

Mr.  Thompson:     Can  you  remember  the  last  time  when  you  did  have 

any  bids  for  less  than  all  the  work? 
Mr.  Mathews:     On  the  contract  prior  to  the  present  one,  we  did.     For 

instance,  we  let  some  parts  of  it  to  Lawrence  &  Van  Buren.     They 

were  given  57  and  57 A,  also  138,  and  one  other  concern  got  all  the 

rest. 

MICHIGAN  SECURITIES  COMMISSION 

Mr.  Lord:-  Mr.  Chairman,  will  you  tell  us  something  about  the  activities 
of  the  Securities  Commission,  what  its  duties  are,  what  you  accom- 
plish for  the  people  of  the  stale  by  way  of  benefits,  etc.? 

Mr.  Merrick:  I  imagine  perhaps  you  better  hear  from  Mr.  Oates  on 
this,  Mr.  Lord. 

Mr.  Oates:  In  view  of  your  long  experience,  Mr.  Merrick,  you  perhaps 
might  be  able  to  give  the  Budget  Commission  more  informal  ion 
regarding  aft'airs  prior  to  the  time  I  became  identified  with  it.  I 
should  be  very  glad  to  explain  matters  I  have  been  cognizant  of 
since  I  have  been  here. 

Mr.  Merrick:  Well,  I  presume  the  duties  of  the  commission  are  well 
known  to  you  gentlemen  of  the  Budget  Commission,  in  a  general  way. 
The  approval  of  stock  issues,  except  those  exempted  under  the  law, 
before  they  may  be  sold  to  the  public  in  Michigan,  covers  it  partly. 
The  commission  has  also  felt  that  it  should  undertake  to  protect 
the  public  in  making  investigations  regarding  reports  received  that, 
on  the  face  of  them,  might  look  fraudulent.  We  try  to  keep  in  touch 
with  stock  brokers  as  much  as  possible,  receiving  advice  from  them 
as  to  stocks  that  are  sold  ;  any  complaints  made  regarding  stock  sales 
are  investigated  by  the  commission.  Originally,  there  were  many 
exemptions  that  were  taken  advantage  of  in  the  law;  for  instance, 
corporations  listed  in  certain  manuals  were  exempt.  I  believe  of 
late  the  commission  has  taken  the  position  that  they  should  not  be 
exempt  and  we  are  requiring  that  all  stock  issues  be  submitted  for 
approval  before  sold. 

Mr.  Lord :  What  do  you  mean  by  stock  issues ;  do  you  mean  stock 
issued  to  original  incorporators  as  well  as  to  the  general  public? 

Mr.  Merrick:  No,  I  think  that  is  one  of  the  exemptions  under  the  law. 
Stock  issued  to  original  subscribers  is  exempt. 

Mr.  Oates:  In  other  words,  the  purpose  of  that  exemption  was  to  per- 
mit people  to  comply  with  the  incorporation  laws  of  the  state  by  sub- 
scribing for  the  required  amount  of  capital  in  order  that  they  might 
file  the  articles  with  the  Secretary  of  State;  but,  we  have  taken  the 
position,  on  stock  issued  to  original  subscribers,  that  if  it  is  subse- 
quently sold  to  the  public  that  the  stock  must  be  approved,  provided 
they  are  offered  in  continuous  transactions. 

Mr.  Lord:  If  it  is  offered  privately,  would  you  have  jurisdiction? 

Mr.  Oates :  Yes,  if  there  is  more  than  one  transaction,  and  we  think  the 
ruling  is  necessary  in  order  to  protect  the  public. 

Mr.  Lord:  When  you  grant  a  certificate  to  a  corporation  to  issue  ith 
stock  or  bonds,  on  what  do  you  base  your  decision  ? 

Mr.  Oates :    Well,  in  the  first  place  the  applicant  must  file  with  us  all 


121 

blanks  which  we  have  prepared  and  which  give  full  information  in 
reference  to  the  financial  status  of  the  company.  If  assets  of  an 
intangible  nature  are  designated  in  the  application,  it  has  been-the 
custom  of  the  commission  to  require  its  experts  to  appraise  or 
determine  the  value  of  such  assets,  and  if  the  principal  asset  of  the 
company  is  intangible,  an  examination  might  be  taken  in  order  to 
ascertain  the  commercial  possibilities.  If  it  is  a  mining  corporation 
or  timber  company,  we  have  been  utilizing  state  experts  to  advise 
with  us  on  these  values.  All  examinations  are  made  at  the  appli- 
cant's expense. 

Mr.  Lord:     Who  makes  those  examinations? 

Mr.  Gates:  State  Geologist  R.  C.  Allen  makes  examinations  of  mining 
corporations,  Professor  Vedder  of  M.  A.  C.  examines  numerous 
patents,  etc. ;  Mr.  Odell  of  Detroit,  Consulting  Engineer,  makes  some 
examinations. 

Mr.  Lord:  Do  you  know  anything  about  the  method  Professor  Vedder 
employes  in  his  examinations? 

Mr.  Gates :  I  shall  be  very  glad  to  submit  his  reports ;  would  be  glad  to 
furnish  copies  of  every  one  of  our  engineer's  reports. 

Mr.  Lord:  Getting  the  value  of  intangibles  is  a  very  important  thing 
in  this  work  and  there  would  have  to  be  a  reasonable  degree  of 
accuracy  or  you  would  get  off  in  your  work. 

Mr.  Gates:  Surely.  In  addition  to  the  expert  examinations  I  have 
referred  to,  the  commission  employs  two  or  three  men  who  make  it 
their  business  to  examine  and  audit  the  applications  of  companies, 
and  subsequently,  we  make  it  our  business  to  examine  their  affairs 
for  the  purpose  of  ascertaining  if  there  is  any  fraud,  and,  it  is  my 
opinion,  that  therein  lies  the  most  important  service  we  can  give  the 
public.  In  numerous  instances,  we  have  had  cases  of  companies 
who  have  gone  back  to  the  places  where  they  have  come  from  and 
voted  large  sales  or  have  taken  stock  for  intangible  assets  without 
approval.  By  periodical  examinations  we  find  those  things  out,  and 
in  many  cases  the  commission  has  revoked  their  licenses.  There  is 
not  a  great  deal  of  publicity  given  these  matters  for  this  reason. 
Michigan  people  invest  in  these  companies,  and  if  we  can  help  the 
people  by  putting  these  companies  on  a  sound  basis,  I  believe  more 
is  accomplished  than  might  be  by  publicity.  I  might  say  here  that  it 
is  the  plan  of  the  present  commission  to  prepare  a  report  which  they 
will  submit  to  the  legislature  next  session.  While  the  law  does  not 
contemplate  that  we  do  this,  in  order  to  inform  the  people  of  the 
state  just  what  we  have  done,  we  expect  to  file  that  report  this  year 
and  we  can  probably  estimate,  in  a  definite  way,  the  amount  of  wild- 
cat stock  that  we  have  prevented  the  sale  of  in  this  state.  Roughly,  I 
would  say  it  would  run  pretty  near  to  one  hundred  million  dollars. 

Mr.  Lord :  How  deeply  do  your  examiners  go  into  the  affairs  of  cor- 
porations when  they  make  periodical  examinations? 

Mr.  Gates :  Mr.  Olmstead  is  right  here,  we  will  ask  him  to  answer  that 
question. 

Mr.  Glmstead :  I  am  just  now  writing  up  a  report  of  the  examination  of 
one  company;  we  go  in  and  find  out  just  how  much  money-is  taken 
in  from  the  "sale  of  stock  and  if  it  agrees  with  the  amount  approved 
by  the  commission,  and  to  find  out  what  they  do  with  the  money. 


122 

The  first  item  here  is  a  small  amount,  being  cash  on  hand ;  we  go  to 
the  bank  and  reconcile  their  bank  account;  I  found  that  of  the 
19,600.00  stocks  and  bonds,  $200.00  was  Liberty  Bonds,  and  $9,400.00 
was  invested  in  a  subsidiary  company  of  their  own.  After  they 
came  to  the  commission,  they  organized  a  company  which  we  are 
going  to  investigate  further. 

Mr.  Lord :  How  do  you  determine  the  value  of  the  assets  ? 
Mr.  Olmstead:  The  value  was  placed  here  by  the  commission  from 
reports  by  State  Geologist  Allen,  and  other  reports.  Here  is  an  item 
of  $75,630.72  on  their  plant,  some  in  cash,  and  $51,250.00  for  land. 
I  got  the  contract  from  the  company  and  found  out  it  agreed,  also 
took  their  vouchers  and  checked  those  back  with  checks  they  had 
drawn,  checking  back  with  the  bills  of  lading  also,  to  show  that  the 
money  actually  went  into  the  plant.  Numerous  other  amounts  were 
checked  out  in  the  same  way.  They  show  an  expense  of  $8,061 .09 ; 
practically  $2,500.00  was  for  advertising.  We  check  this  all  out  as 
near  as  we  can ;  also  they  show  $3,635.00  for  salaries  and  that  item 
was  checked  out  to  find  out  who  got  the  money  because  they  were 
not  to  receive  any  salaries  as  officers  of  the  corporation. 

Mr.  Lord :  The  examination  really  consists  of  ascertaining  whether  the 
corporation,  or  company,  has  complied  with  the  rules  of  the  com- 
mission. 

Mr.  Olmstead:  Well,  yes.  Here  is  $21,465.00  commissions  on  stock 
sales.  The  commission  sets  the  rate  of  commission  they  allow  them 
to  pay  on  stock  sales.  In  some  other  states  they  pay  as  high  as  40,  50 
and  60  per  cent  on  some  stock,  which  is  unreasonable.  The  commis- 
sion allows  them  15  per  cent,  invariably.  We  check  those  amounts 
out  and  have  sometimes  found  they  were  not  correct.  We  examined 
a  corporation  a  short  time  ago  which  we  made  put  back  $18,000.00. 

Mr.  Lord:     Are  these  items  a  copy  of  the  statement? 

Mr.  Olmstead:  I  make  my  own  statement,  they  are  regular  book 
accounts.  The  liabilities  only  consist  of  two  items. 

Mr.  Lord :  Are  your  examinations  made  subsequent  to  the  sale  of 
stock? 

Mr.  Olmstead:     Yes. 

Mr.  Lord:     How  long  does  it  take  to  make  an  examination,  ordinarily? 

Mr.  Olmstead :  Well,  it  all  depends.  If  the  institution  is  clean,  that  is, 
the  books  kept  up  well,  it  does  not  take  very  long. 

Mr.  Lord:  After  you  have  made  these  examinations,  in  what  manner 
do  you  handle  the  fees  paid  b,v  the  corporation  examined? 

Mr.  Olmstead :  We  usually  ask  them  for  a  fee  to  cover  the  cost  of  the 
examination. 

Mr.  Lord:     You  make  them  pay  the  fee  in  advance,  then. 

Mr.  Olmstead :     Yes,   sir. 

Mr.  Lord :     What  are  the  charges  ? 

Mr.  Olmstead:  The  law  provides  for  $7.00  a  day  for  the  time  we  are 
away  from  Lansing,  and  our  traveling  expenses. 

Mr.  Lord:     What  is  done  with  the  money  you  collect  in  advance? 

Mr.  Oates:  It  is  put  in  an  unapplied  account  and  deposited  with  the 
State  Treasurer. 

Mr.  Olmstead :  I  make  out  my  bill  for  the  time  I  am  away  from  Lansing, 
so  much  to  Olmstead  and  so  much  to  the  state ;  the  bills  are  approved 


123 

by  the  commission  and  paid  out  of  the  money  on  deposit  with  the 

State  Treasurer. 
Mr.  Lord :     Approved  by  the  commission,  but  not  audited  by  the  Auditor 

General  or  by  the  Board  of  State  Auditors? 
Mr.  Gates :     Bills  are  approved  by  the  commission. 
Mr.  Lord:     Are  any  of  your  bills  audited  by  the  Auditor  General? 
Mr.  Gates:     Gh,  yes,  all  except  these. 
Mr.  Lord  :     That  is,  if  you  make  the  examination  first,  your  expenses  are 

paid  from  the  general  fund  and  those  accounts  are  audited  by  the 

auditing  department. 
Mr.  Glmstead:     Just  the  other  day  I  made  up  a  bill;  we  went  up  last 

fall  to  Alpena  and  did  not  have  any  money  up  there ;  my  bill  was  put 

in  through  the  Board  of  Auditors,  and  we  afterward  got  in  touch 

with  the  corporation  and  they  paid  the  money. 
Mr.  Lord :     Where  you  don't  receive  a  deposit,  your  course  is  to  bill  the 

corporation  for  the  amount? 
Mr.  Glmstead:     Yes,  sir. 
Mr.  Lord:     Where  there  is  no  deposit  made,  you  bill  the  corporation, 

collect  the  fees  and  turn  them  over  to  the  State  Treasurer? 
Mr.  Gates:     Yes,  sir. 
Mr.  Lord :     In  cases  of  that  kind  are  the  expense  vouchers  audited  by  any 

part  of  the  state  government? 
Mr.  Gates:     Where  examinations  are  made,  the  examination  expenses 

are  all  approved  by  the  Board  of  Auditors. 
Mr.  Lord :     Are  there  any  corporations  examined  which  do  not  pay  the 

traveling  expenses? 
Mr.  Gates :     Not  to  my  knowledge.    If,  for  instance,  we  should  examine 

a  company  who  had  not  filed  an  annual  report  and  our  examination 

should  reveal  the  fact  that  the  company  has  gone  out  of  business,  the 

expenses  of  that  examination  would  go  to  the  Board  of  Auditors  for 

approval. 
Mr.  Merrick :     The  deposit  account  consists  only  of  amounts  deposited 

by  applicants. 

Mr.  Lord :     What  is  the  object  of  having  funds  received  by  the  commis- 
sion credited  to  so  many  different  funds? 
Mr.  Merrick:     This  deposit^ will  ultimately  work  itself  all  out;  it  will 

either  go  to  the  examiner  or  be  returned ;  it  is  a  temporary  account. 
Mr.  Lord:  The  point  I  wanted  to  make  is  that  your  expense  accounts 

are  not  audited  by  any  state  auditing  department. 
Mr.  Gates:     Just  those  accounts. 
Mr.  Lord:     Don't  you  think  it  would  be  a  pretty  good  thing  for  the 

commission  if  that  was  required? 
Mr.  Gates :     Personally,  I  see  no  objection  to  it. 
Mr.  Merrick:     I  would  not  have  any  objection  to  it.    The  only. interest 

is  between  this  department  and  the  applicant. 
Mr.  Lord :     The  fact  that  it  is  a  corporation  that  pays  a  fee  doesn't  mean 

that  it  is  not  public  business. 
Mr.  Gates :     All  our  records  are  public  records. 
Mr.  Lord:     The  fact  is  that  we  should  have  uniformity  in  the  matter 

of  checking  up  all  the  expenses  of  the  state,  and  in  the  accounting 
system. 


124 

Mr.  Merrick:     Well,  that  is  the  point;  there  is  no  expense  to  the  state.; 

Mr.  Lord:  Well,  you  could  say  that  about  several  departments  of  the 
state;  the  Insurance  Department,  for  instance,  and  your  own  depart-.] 
ment,  Mr.  Merrick.  In  your  department  all  of  that  money  goes  intoi 
the  general  fund  and  your  vouchers  are  all  audited ;  now,  isn't  that 
the  easiest  and  best  way  to  do  it? 

Mr.  Merrick :     There  would  not  be  any  objection  but,  of  course,  the  appl 
cant  has  a  right  to  object  to  these  bills.     If  they  are  wrong  th( 
would  have  to  be  made  right.    I  think  it  would  be  better  to  have 
the  other  way. 

Mr.  Lord:     My  contention  always  has  been  thai  all  moneys  of  evei 
kind  and  description  collected  by  any  agency  of  the  state  shoul 
be  turned  into  the  state  treasury  and  paid  out  only  on  warrant 
the  Auditor  General ;  then  you  have  a  complete  transaction  that  tl 
public  will  understand.     Then,  if  anybody  wanted  to  find  out  wlu 
the  actual  expenses  of  the  state  government  are,  they  would  go 
the  Auditor  General;  now,  under  this  system   would   he  have  an; 
record  of  the  actual  expenditures  of  this  department? 

Mr.  Gates:     He  would,  except  those  particular  examination  fees. 

I  will  tell  you  that  this  question  of  economy  should  be  taken  i'roi 
another  angle.  The  question  of  centralizing  the  authority  of  tin 
departments  and  getting  down  to  the  root  of  the  thing;  we  have  ii 
the  Secretary  of  State's  office  a  corporation  division,  which  it  eosl 
a  great  deal  of  money  to  conduct;  there  are  companies  that  fi] 
articles  of  corporation  there  and  then  they  have  to  come  here  rigl 
afterwards  to  get  permission  to  sell  their  stock;  that  work  ought 
be  done  here.  Take  the  Game  Department  and  the  Fish  Department 
they  are  doing  duplicate  work.  Von  could  have  the  present  force 
the  Game  Department  take  care  of  all  the  Fish  Commission  worl 

Mr.  Lord:  Your  idea  would  be  to  create  a  corporation  department  that 
would  pass  on  the  whole  thing. 

Mr.  Gates:  Yes;  now  here  are  the  companies  that  organize  and  pay 
franchise  fees,  admitting  them  to  go  ahead  and  do  business;  we  could 
tell,  if  we  had  jurisdiction,  whether  it  should  do  business  in  the  state 
and  we  could  do  it  with  practically  the  force  we  have  now.  I  tell 
you  there  is  a  tremendous  field  for  centralization  of  work  in  the 
state. 

Mr.  Thompson:     Which  way  ought  it  to  be  handled? 

Mr.  Gates:     I  believe  the  management  of  same  should  go  to  this  depart- 
ment.   The  Secretary  of  State's  office  simply  goes  through  the  form 
of  procedure  of  passing  on  articles  of  association,  in  which  they  | 
allege  they  are  turning  in  so  much  real  estate  or  something  of  that 
kind;  they  have  no  way  to  determine,  as  we  have ;  they  have  to  admit  | 
the^ corporation  as  a  matter  of  course. 

Mr.  Lord:     The  question  I   raised  in   regard  to   auditing  of  accounts! 
had  no  connection  whatever  with  the  economical  conduct  of  this 
department,   simply  whether  this  department  should  not  have  its 
accounts  pass  through  the  same  channels  as  do  the  accounts  of  other] 
departments. 
How  many  examiners  have  you? 

Mr.  Gates :     We  have  three  men  on  the  pay  roll. 

Mr.  Lord:     What  are  those  men  paid? 


125 

Mr.  Gates :  Our  chief  examiner  gets  $3,500.00  a  year,  one  other  exam- 
iner $2,500,00,  and  one  $2,000.00. 

Mr.  Lord:     Who  fixes  those  salaries? 

Mr.  Gates:  The  commission,  and  they  are  approved  by  the  Board_of 
Auditors. 

Mr.  Lord :     What  do  you  pay  your  special  examiners  ? 

Mr.  Gates :  $25.00  a  day  to  expert  examiners,  such  as  a  patent  engineer 
or  mining  engineer. 

Mr.  Lord :     What  do  you  pay  men  who  make  the  appraisal  of  property  ? 

Mr.  Gates  :     That  is  usually  done  by  our  own  men. 

Mr.  Lord:  Do  you  have  many  examinations  that  are  made  by  expert 
examiners  ? 

Mr.  Gates :  Why,  during  the  year  I  suppose  Mr.  Allen  might  make  from 
twenty  to  twenty-five  of  those  examinations. 

Mr.  Lord:     What  does  Mr.  Allen  get  as  head  of  the  Geological  Survey? 

Mr.  Gates :     I  think  it  is  $5,000.00  a  year. 

Mr.  Lord:  And  he  is  paid  extra  at  the  rate  of  $25.00  a  day  for  your 
work  ? 

Mr.  Gates :  No.  At  a  recent  meeting  I  think  his  salary  as  State  Geolo- 
gist was  fixed  at  $5,000.00  a  year  with  the  understanding  that  the 
money  for  all  examinations  made  for  this  commission  should  be 
credited  to  the  fund  of  the  Geological  Survey. 

Mr.  Lord:     What  does  this  man  Gdell  examine? 

Mr.  Gates :  WThy,  he  is  a  consulting  engineer,  examines  patents,  good 
will  and  other  intangible  assets. 

Mr.  Lord :  Will  you  tell  us  what  procedure  is  taken  by  the  commission 
in  the  matter  of  stock  placed  in  escrow  ? 

Mr.  Gates:  At  the  time  of  the  hearing  on  the  application,  if  the  com- 
mission determines  that  a  certain  amount  of  stock  issued  for  any 
form  of  intangible  assets  shall  be  deposited  in  escrow,  they  issue  an 
order  to  that  effect  and  require  the  corporation  to  file  certificates 
with  this  office  at  the  same  time  they  execute  an  escrow  agreement, 
which  agreement  together  with  the  stock  certificates  is  sent  in  here 
and  filed  with  the  State  Treasurer. 

Mr.  Lord :     Is  the  agreement  made  with  you  or  with  the  State  Treasurer? 

Mr.  Gates :  They  come  here  first  for  approval  and  we  deposit  with  the 
State  Treasurer.  That  is  done  on  formal  resolution  of  the  board. 

Mr.  Lord:     Do  you  make  any  subsequent  modifications  of  these  orders? 

Mr.  Gates:  We  have  in  some  instances,  that  is  done  on  resolution  of 
the  commission.  There  is  no  matter  of  any  importance  passed  on  by 
any  officer  without  the  approval  of  the  commission. 

Mr.  Lord:  What  are  the  requirements  for  the  return  of  the  stock 
placed  with  you  in  escrow  ? 

Mr.  Gates :  The  general  provision  of  the  agreement  is  that  the  company 
must  be  on  a  6  per  cent  earning  basis  before  it  is  released  and  when 
the  corporation  desires  it  to  be  released  it  makes  a  formal  applica- 
tion. The  commission  refers  it  to  one  of  its  examiners  and  he  makes 
an  examination  to  find  out  the  condition  of  the  corporation.  Gne 
examination  Mr.  Glmstead  made  a  short  time  ago,  he  found  some  of 
the  stock  had  been  sold,  and  the  commission  ordered  that  a  certain 
amount  of  the  stock  be  cancelled  and  returned  to  the  Treasurer. 
Mr.  Lord:  What  authority  have  you  over  promissory  notes? 


126 

Mr.  Gates :  It  is  one  of  the  exemptions  in  the  law  that  it  does  not  affect 
the  sale  of  unsecured  commercial  paper. 

Keferring  again  to  approval  of  stock  issues,  I  think  that  the  sub- 
scriptions to  the  stock  of  all  companies  whether  the  stock  is  original 
or  otherwise  should  first  be  passed  on  by  this  commission.  I  think 
this  original  stock  exemption  should  be  omitted  from  the  act. 

Mr.  Merrick :  That  may  be  true  but  I  do  not  agree  witli  you  on  that,  Mr. 
Gates.  I  think  if  you  or  I  want  to  organize  it  should  be  given  the 
corporation  rights  of  the  state.  If  we  want  to  organize  and  want 
the  stock  ourselves,  I  cannot  see  why  we  should  not  do  it. 

Mr.  Gates :     It  would  be  a  very  difficult  matter  for  us  to  follow  a  trans- 
action of  that  kind  if  it  got  into  the  market.    I  think  it  ought  to 
regulated  in  its  inception. 

Mr.  Lord :     You  think  in  that  case  there  would  be  a  possibility  of  sul 
quent  distribution  of  the  stock? 

Mr.  Gates:  The  great  difficulty  would  be  in  following  up  a  sale  that  if 
made  by  some  fellow  who  has  subscribed  for  some  original  stocl 
The  principle  that  Mr.  Merrick  contends  for  is  undoubtedly  correct 
and  thereby  lies  the  confusion  on  these  two  acts. 

Mr.  Lord:  What  do  you  do  in  a  case  where  articles  of  incorporatioi 
have  been  refused  by  the  Secretary  of  State? 

Mr.  Gates:     We  never  get  them  here. 

Mr.  Lord :     Is  that  true  also  in  cases  of  foreign  corporations  ? 

Mr.  Gates:  Absolutely,  yes  sir.  They  have  to  file  certified  copies  oi 
their  articles  certified  to  by  the  Secretary  of  the  state  where  th< 
corporation  was  organized. 

Mr.  Lord :  But,  if  not  admitted  to  do  business  by  the  Secretary  of  thij 
state,  then  what? 

Mr.  Gates:     That  is  two  different  legal  propositions. 

Mr.  Lord :  Now,  the  question  is  whether  they  would  sell  their  stock  in 
violation  of  the  corporation  laws  of  the  state  provided  you  gave 
them  permission  to  sell  stock. 

Mr.  Gates :  There  is  a  possibility  of  that  under  the  present  laws.  That 
is  another  reason  why  we  ought  to  determine  whether  they  ought  to 
do  business  in  this  state.  I  think  section  ten  should  be  amended. 

Mr.  Lord :  Getting  back  to  the  corporation  matter ;  isn't  there  more  or 
less  of  a  duplication  of  effort  between  this  department  and  the  cor- 
poration division  of  the  Department  of  State? 

Mr.  Gates :  Why,  I  don't  know  whether  you  would  call  it  duplication ; 
we  pass  on  the  same  matters  as  the  Secretary  of  State's  office. 

Mr.  Lord :  Yes,  and  there  is  more  or  less  expense  incurred  for  filing  and 
keeping  records,  etc.,  isn't  there  ? 

Mr.  Gates :  Yes,  there  is ;  I  believe  there  is  duplication  of  work.  It  is 
also  true  in  the  filing  of  reports  by  companies.  I  don't  think  that  the 
state  should  require  unnecessary  duplication  of  reports  from  com- 
panies. Gur  act  requires  them  to  file  with  us  an  annual  report,  the 
Secretary  of  State's  office  requires  the  same  thing. 

Mr.  Lord :     Does  your  act  prescribe  the  form  of  that  report  ? 

Mr.  Gates:  Yes.  Also  for  increase  in  capital  stock.  Lots  of  them, 
when  they  file  for  record  an  increase  in  capital  stock  with  the  Sec- 
retary of  State's  office,  think  they  have  complied  with  the  law,  but  it 


127 

should  have  been  filed  here  also.     Fifty  per  cent  of  them  think  all 
that  is  necessary  is  to  file  it  with  the  Secretary  of  State. 

Mr.  Lord:  In  case  of  railroad  corporations,  for  instance;  they  would 
have  to  file  three  reports,  wouldn't  they  ? 

Mr.  Gates :  They  are  exempt  from  the  provisions  of  our  law,  the  public 
utilities  all  are. 

Mr.  Lord :  Your  idea  would  be  to  have  one  department  pass  on  all  cor- 
poration matters. 

Mr.  Gates :     Pass  on  all  securities. 

Mr.  Lord :  In  that  case,  would  you  advocate  the  employment  of  a  state 
engineer?  Couldn't  a  state  engineer,  a  competent  man,  do  all  the 
work  now  done  by  your  expert  examiners  and  appraisers  ? 

Mr.  Gates :  I  never  knew  an  engineer  that  was  versed  in  all  these 
branches  of  the  work. 

Mr.  Lord:  If  the  engineer  himself  did  not  do  it,  he  would  probably 
have  someone  in  his  office  that  could  do  it. 

Mr.  Gates :     Yes,  that  might  be  done. 

Mr.  Lord :     Don't  you  think  it  would  be  a  good  thing  ? 

Mr.  Merrick:  I  think  it  would  be  a  good  thing  provided  the  engineer 
could  work  along  all  lines  required  by  the  Securities  Commission 
and  the  Railroad  Commission ;  it  would  be  a  very  good  plan,  I  should 
think. 

Mr.  Lord:     What  annual  salary  do  you  get,  Mr.  Gates? 

Mr.  Gates :    $4,000.00 ;  the  chief  examiner  gets  $3,500.00. 

Lord :     What  is  the  procedure  now  when  an  examination  of  a  cor- 
poration is  ordered  ?    Are  you  directed  by  the  commission  to  go  to 
a  certain  place,  Mr.  Glmstead,  and  make  the  examination? 
Glmstead :     Yes  sir,  by  letter. 

Lord :  So  that  the  transaction  is  a  matter  of  record  ? 
Glmstead :  Yes  sir,  and  I  file  a  typewritten  record  of  my  findings. 
Gates :  In  addition  we  have  something  of  a  card  record  so  that  we  can 
tell  anybody  very  quickly  what  the  history  of  the  whole  corporation 
is.  I  think  the  commission  attempts  in  every  instance  to  see  that 
the  corporations  are  in  proper  shape,  that  there  is  no  fraud  in  them. 
Gne  of  the  big  things  we  can  do  is  to  become  a  clearing  house  to  the 
public  on  these  companies.  All  these  companies  should  be  subjected 
to  periodical  examinations.  There  is  reason  why  the  money  of 
investors  should  be  protected;  there  are  thousands  of  companies 
operating  in  Michigan  that  were  in  this  old  manual  list  proposition 
which  was  repealed.  Now,  every  company,  no  matter  whether  it  is 
the  Goodyear  Rubber  Company,  Armour  &  Son,  or  some  little  com- 
pany out  in  the  country,  have  to  come  here. 

Mr.  Merrick :  I  think  the  list  of  manuals  required  a  certain  amount  of 
investigation  before  they  could  be  listed.  Investigations  in  the  last 
year  or  so  developed  the  fact  that  this  was  not  the  case. 

Mr.  Lord:  What  are  the  necessary  qualifications  required  for  appoint- 
ment to  a  position  with  this  commission,  such  as  examiners  or 
clerks  ? 

Mr.  Gates:     Most  of  our  clerks  are  stenographers.     We  have  one  filing 
clerk  who  had  considerable  experience  in   the  Auditor  General's 
office,  and  we  have  one  bookkeeper. 
Mr.  Lord :     How  do  you  pick  your  examiners  ? 
Mr.  Gates :     They  have  been  largely  selected  on  account  of  qualifications 


128 

in  other  lines  of  business.  Mr.  Olmstead  was  for  many  years  a  bank 
examiner ;  Mr.  Towne  was  in  the  Auditor  General's  department ;  Mr. 
Munshaw's  work  is  of  a  special  nature.  He  makes  examinations  of 
certain  companies,  but  most  of  his  work  is  in  running  down  viola- 
tions of  the  blue  sky  law  that  we  don't  get  at. 

Mr.  Lord  :     What  are  the  penalties  for  these  violations  ? 

Mr.  Gates :     Fines  and  imprisonment. 

Mr.  Lord :     Where  does  the  money  from  fines  go  ? 

Mr.  Gates :     Goes  to  the  counties. 

Mr.  Lord :     Don't  you  think  it  should  go  to  the  state  ? 

Mr.  Gates:  The  act  never  contemplated  that  we  would  be  a  self-sup- 
porting institution,  but  as  a  matter  of  fact  we  have  probably  turned 
over  to  the  state  $40,000  or  $50,000  since  our  operation. 

Mr.  Lord:     I  do  not  see  why  the  county  should  get  all  the  benefit  by 
way  of  fines,  etc. 
When  did  this  commission  start  the  deposit  fund? 

Mr.  Gates :  Before  I  came  to  this  department.  I  think,  the  early  part 
of  last  year. 

Mr.  Lord:     What  disposition  was  made  of  the  money  before  that  time? 

Mr.  Merrick:  My  recollection  is  that  it  was  handled  by  the  Securities 
Commission  themselves.  The  money  was  retained,  I  think,  up  to 
about  two  years  ago.  since  that  time  it  lias  been  deposited  with  the 
State  Treasurer. 

Mr.  Lord:  Are  your  various  orders  all  authorized  by  resolution  of  the 
commission  ? 

Mr.  Gates:  Each  matter  is  handled  separately,  each  order  separately 
authorized,  that  is  the  rule. 

Mr.  Lord:  The  expenses  and  per  diem  of  these  expert  men,  is  it  a  gen- 
eral authorization  that  they  each  receive  *_!.">. 00  a  day  and  expenses, 
or  are  they  told  what  compensation  they  will  receive  every  time  an 
examination  is  ordered?  . 

Mr.  Gates :     They  put  in  their  bill  for  what  their  services  are. 

Mr.  Lord:  I  understood  you  to  say  that  the  charge  has  been  f 25.00  a 
day. 

Mr.  Gates:     That  is  what  has  been  allowed. 

Mr.  Lord :     That  is  the  uniform  rate  of  pay  ? 

Mr.  Gates :     Yes,  for  engineers. 

Mr.  Lord :     So  that  it  is  handled  by  the  presentation  of  a  bill,  approv 
by  the  commission,  authorizing  the  treasurer  to  pay  that  amount 
of  money? 

Mr.  Gates  :     Yes,  sir: 

(Records  show  the  following  amounts  paid  to  expert  examiners) 

Mr.  Allen,  July  1st  to  Gctober  30th,  1917 $    374.75 

(Mr.  Gates:   That  was  under  the  old  arrangement 
before  the  Geological  Board  made  the  change.) 

Mr.  Allen,  from  date  above  to  June  26th,  1918 $1,011.45 

Mr.  Gdell,  from  July  1st,  1917,  to  June  26th,  1918, 

services  and  expenses $1,194.13 

Mr.  Vedder,  from  July  1st,  1917,  to  June  26th,  1918 $1,036.55 

Mr.  Lord:     What  position  does  Mr.  Vedder  hold  at  the  Agricultura 
College? 

Mr.  Gates :     I  think  Professor  of  the  Engineering  Department. 


129 

Mr.  Lord:  Do  you  know  whether  he  gets  an  annual  salary  at  the 
College? 

Mr.  Gates :     I  think  so. 

Mr.  Lord:  No  allowance  made,  possibly,  for  the  time  he  is  engaged  in 
the  Securities  Commission  work? 

Mr.  Lord :  Do  you  make  a  record  of  the  authorizations  of  the  Board  of 
Auditors  fixing  the  rate  of  salary  of  yourself  and  of  the  other  sal- 
aries in  the  office? 

Mr.  Gates :     Gh,  no. 

;Mr.  Lord:  Do  you  have  any  record  of  their  authorization  by  the  com- 
mission ? 

Mr.  Gates :  I  think  when  the  board  of  auditors  approve  it,  it.  is  authori- 
zation enough. 


PUBLIC  DGMAIN  COMMISSION. 

Mr.  Lord:  You  are  the  Secretary  of  the  Public  Domain  Commission, 
Mr.  Carton? 

Mr.  Carton:     Yes    sir. 

Mr.  Lord:  Will  you  state  what  your  duties  are  as  Secretary  of  this 
commission,  and  what  the  various  activities  of  the  commission  are? 
What  you  have  done,  what  you  are  doing  and  what  you  propose  to  do 
in  the  future? 

Mr.  Carton:  Gne  of  the  things  we  have  done  has  been  to  classify  the 
lands  as  we  went  along,  so  that  those  lands  that  don't  have  anything 
on  them,  cut  over  lands,  are  so  noted  on  our  records  so  that  they 
could  be  eliminated  from  the  trespass  list.  We  are  working  that  out 
so  that  we  will  probably  be  able  to  eliminate  from  one-fourth  to  one- 
third  of  the  acreage,  and  will  not  have  to  look  after  that  nor  include 
it  in  the  trespass  list. 

The  Public  Domain  Commission  has  charge  of  all  the  lands  owned  by 
the  State  of  Michigan,  which  comprise,  approximately,  six  hundred 
thousand  acres.  In  addition  to  that,  they  have  charge  of  all  of  the 
work  along  reforestation  lines;  have  charge  of  all  the  lake  bottoms 
in  the  state,  including  the  handling  of  the  St.  Clair  flats ;  selling  of 
sand  and  gravel  from  the  lake  bottoms ;  have  charge  of  such  work  as 
Michigan  is  doing  along  what  is  known  as  immigration  lines  and  the 
settlement  of  such  land  as  is  suitable  for  agricultural  purposes.  In 
all  cases  where  state  lands  are  made  available  for  state  settlements, 
a  thorough  examination  is  made  of  every  piece  to  see  that  it  has  agri- 
cultural possibilities  before  we  either  dispose  of  it  or  allow  it  to  go  to 
homesteaders.  All  of  the  original  records  of  every  man's  home  and 
of  every  man's  farm  in  the  State  of  Michigan  are  here.  We  are  the 
custodians  of  the  original  records  of  every  foot  of  land  within  the 
State  of  Michigan.  The  handling  of  the  activities  along  the  land  line 
is  largely  the  hadling  of  homestead  property  which  is  now  somewhat 
limited  and  getting  more  so  all  the  time,  and  the  disposing  of  or 
handling  of  city  and  village  property  which  comes  to  the  commission 
through  the  Tax  Homestead  Law.  There  are  about  500,000  acres  of 
land  which  came  to  the  state  through  channels  of  the  Tax  Homestead 
Law.  About  100,000  acres  in  addition  to  the  500,000  acres  are  the 


130 

remnants  of  land  received  from  the  United  States  Government  und< 
the  act  which  admitted  Michigan  into  the  union  ;  this  act  allowing 
Section  16  of  every  township  in  the  state  to  become  state  property 
Later  on,  swamp  land  was  made  which  gave  to  the  state  other  land 
there  were  at  different  times  some  2,400,000  acres  which  reverted 
the  state  for  non-payment  of  taxes  for  a  period  of  five  years.  Tl 
State  of  Michigan  at  one  time  or  the  other  has  owned  some  11,000,0( 
acres  of  land. 

We  also  do  the  work  formerly  carried  on  by  the  Stale  Land  Depai 
ment.  That  is,  the  furnishing  of  plats,  writing  of  field  notes,  and  a 
of  those  things  which  originally  the  Land  Department  did.  Ah 
we  have  the  work  of  conservation.  We  have  about  one-half  of  th( 
lands  in  the  State  of  Michigan  set  aside  for  reforestation  purpose* 
and  this  list  shows  the  number  of  acres  in  the  different  reserves  ii 
the  different  counties.  It  is  our  hope  that  with  proper  fire  prol 
tion  and  the  planting  of  such  acres  of  land  that  have  from  extrem 
fire  or  other  causes  become  almost  cleared,  that  in  time  we  can  repr< 
duce  in  Michigan,  to  a  limited  extent,  at  least,  some  of  the  timli 
that  we  originally  had.  There  is  set  aside  for  that  purpose  27-l,<)( 
acres  of  land  and  these  exchanges  that  Mr.  Lord  just  read  about  ai 
for  the  purpose  of  allowing  us  to  block  solidly  this  land.  The  I'ni 
States  Government  is  doing  the  same  thing.  The\  have  two  reserve 
"  one  in  losco  county  and  one  in  Marquette  county.  By  this  exchanj 
with  them  .they  are  getting  all  the  state  lands  within  their  bonndari( 
and  we  are  getting  all  government  lands  within  the  boundaries  of  m 
reserves.  When  these  exchanges  are  completed,  the  state  will  ha1 
20,000  more  acres  of  land. 

Mr.  Lord :     What  has  been  the  cost  of  effecting  those  exchanges  ? 

Mr.  Carton:     We  have  that.    The  cost  of  trespass  and  examination; 
can  give  you  those  figures. 

Mr.  Lord :     What  we  would  like  to  get  is  the  exact  cost  of  effecting  tl 
exchanges  of  these  lands. 

Mr.  Carton:  I  might  say  this.  With  our  system  of  keeping  track 
affairs,  which  we  think  is  very  good  and  we  hope  you  will  think  so, 
we  can  tell  you  the  cost  of  every  horse  on  any  one  of  our  reserves 
and  what  it  costs  to  shoe  them,  or  feed  them. 

Mr.  Lord:  Under  the  rules  of  the  commission,  what  constitutes  a  tres- 
pass ? 

Mr.  Carton:  A  man  going  on  any  land  and  taking  property  without  the 
consent  of  the  owner  of  the  land. 

Mr.  Lord:     Have  you  prosecuted  many  cases  for  trespass? 

Mr.  Carton :     Not  very  many. 

Mr.  Lord :     Do  you  usually  effect  a  settlement  with  the  trespasser  ? 

Mr.  Carton:  That  is  according  to  whether  it  is  a  wilful  trespass  or 
whether  it  is  a  mistake.  Sometimes  it  is  a  mistake  and  if  we  deter- 
mine that  it  was  not  a  wilful  trespass,  it  is  settled.  If  a  man  delib- 
erately and  knowingly  steals  timber,  we  prosecute  him. 

Mr.  Lord:     How  many  did  you  prosecute  last  year? 

Mr.  Carton:  Now,  let  me  say  to  you,  Mr.  Lord,  that  our  department, 
for  the  purpose  of  carrying  on  this  thing,  has  a  supervisor  of  field 
division.  He  has  a  record  of  all  those  things,  and  when  we  take  up 
that  branch  of  it,  we  can  get  it. 


131 

Mr.  Lord:  Do  your  trespass  agents  do  anything  else  beside  looking 
after  trespasses? 

Mr.  Carton :     They  make  examinations  as  well. 

Mr.  Lord :  So  that  the  cost,  as  shown,  will  show  both  costs  of  examina- 
tions and  trespass? 

Mr.  Carton :  We  divide  it  in  two.  If  a  man  works  a  day  and  makes  an 
examination  and  while  there  if  he  spends  another  day  looking  over 
trespasses,  when  the  reports  come  in,  there  is  a  division  made  as  to 
expenses,  etc. 

Mr.  Lord :  Trespass  agents  last  month  cost  $1,166.91 ;  does  this  figure 
include  traveling  expenses? 

|Mr.  Carton :  I  think  it  does.  We  have  two  men  operating  in  the  Upper 
Peninsula  and  others  in  the  Lower  Peninsula. 

JAIr.  Lord:  What  is  this  item  of  $4,626.72  for  laborers  in  connection 
with  trespass  work? 

Mr.  Carton :     That  is  for  repairs  on  reserves. 

Mr.  Lord:     In  your  classification  of  disbursements,  you  show  the  cus- 
todians at  §5,190.00,  and  in  this  statement  it  is  |525.00.     How  is 
that? 
Mr.  Carton:     That  statement  is  for  the  month  of  June  isn't  it? 

Mr.  Lord  :  So  that  your  trespass  agents  really  cost  in  the  neighborhood 
of  114,000.00  last  year? 

Mr.  Carton:     You  really  couldn't  figure  a  trespass  agent  at  much  less 

than  |2,000.00  a  year,  including  his  traveling  expenses. 
Mr.  Lord:     How  many  have  you? 

Mr.  Carton:     Seven.     They  have  practically  done  all  the  trespass  and 

examination  work. 
Mr.  Lord :     You  have  an  item  of  cost  for  land  examiners,  f  171.00 ;  that 

would  show  that  the  big  cost  was  for  the  trespass  agents. 
Mr.  Carton:  I  will  tell  you  what  we  do.  If  we  should  get  an  applica- 
tion for  exchange  in  the  neighborhood  of  some  of  these  reserves,  we 
would  send  one  of  our  men  from  the  reserve  over  to  examine  the 
land.  I  will  tell  you  what  there  might  be  about  this.  The  month  of 
June  might  have  been  a  very  limited  month  as  to  applications  for 
exchanges,  and  that  figure  is  probably  for  the  month  of  June.  You 
would  have  to  take  it  for  a  whole  year  instead  of  a  month. 
Mr.  Lord :  Your  total  cost  according  to  classification  of  land  examiners 
was  only  |4,314.93,  so  that  the  cost  of  examinations  does  not  compare 
with  that  of  trespass  agents,  which  is  $8,545.03.  Now,  the  question 
is,  whether  it  is  profitable  for  the  state  to  pay  for  these  men  to  go 
around  and  see  if  anyone  has  stolen  fifty  cents  worth  of  property. 
Mr.  Carton :  That  is  always  a  question.  The  same  thing  applies  to  the 
question  as  to  the  value  of  the  trespass  agent,  as  to  the  question  of 
the  value  of  a  policeman.  While  it  is  true  that  a  balance  to  the  profit 
of  the  state  never  can  be  shown,  the  fact  remains  that  they  are  on  the 
job  and  that  their  presence  prevents  a  lot  of  things  being  done  that 
probably  would  be  done  if  they  were  not  there.  There  never  has  and 
never  can  be  shown  a  profit,  so  that  there  is  always  a  question  in  the 
minds  of  the  people,  and  in  my  mind,  whether  it  is  highly  profitable 
or  not.  I  think  it  is  or  I  would  not  be  in  favor  of  retaining  it. 
Mr.  Lord :  Are  these  land  examiners,  and  you  have  several  of  them, 
kept  busy  at  $4.00  a  day? 


132 

Mr.  Carton":     The  trespass  men  are  practically  kept  busy  all  the  time. 
They  get  paid  when  they  work,  and  they  work  perhaps  seven-eighths 
of  the  time. 
Mr.  Lord :     When  you  have  effected  all  the  exchanges  you  want  to  effect, 

what  will  these  men  have  to  do  then? 

Mr.  Carton  :     With  the  working  out  of  the  classification,  the  work  of  the 
Public  Domain  Commission  along  certain  lines  is  going  to  get  less 
every  year.     After  the  lands  are  gathered  in  blocks,  they  will  be  ! 
under  the  State  Forester  and  the  work  of  the  trespass  men  and  I 
examiners  will  be  over  with.     If  we  are  able  to  do  certain  things 
without  being  misjudged,  in  two  or  three  years  we  could  consolidate 
all  of  our  lands  in  blocks.    If  we  could  go  out  and  get  a  statement 
from  individuals  of  what  they  wanted  for  their  lands  inside  of  these 
reserves,  and  work  with  them  and  help  them,  we  could  effect  a  great 
number  of  exchanges.    If  we  could  get  all  the  lands  consolidated  into 
blocks,  then  the  trespass  agent  could  go  and  the  examinations  would 
be  over,  but  the  duties  of  the  forestry  department  would  increase. 
The  real  object  of  the  consolidation  is  reforestation.    The  real  object 
of  the  abolishment  of  the  land  office  was  to  stop  the  selling  of  Mich- 
igan's chief  lands  to  people  who  went  out  and  exploited  the  other 
fellow.    We  hold  up  our  hands  in  horror  to  the  individual  that  does 
those  things,  and  still  we  were  doing  the  same  thing  ourselves. 
Mr.  Lord:     Are  there  any  efforts  being  made  by  your  department  now 

to  dispose  of  those  lands? 

Mr.  Carton:  We  don't  want  to  sell  them  because  the  lands  that  Mich- 
igan has  today  are  the  remnants  of  2,400,000  acres  of  land  that  people 
would  not  pay  taxes  on.  These  lands  are  practically  worthless 
except  for  reforestation  purposes,  game  preserves,  etc.  All  of  these 
things  go  hand  in  hand,  it  must  all  be  worked  out  in  harmony. 
Mr.  Lord:  Would  it  not  be  a  good  policy  for  Michigan  to  dispose  of  the 

lands  that  are  suitable  for  agriculture? 

Mr.  Carton:  We  are  allowing  them  to  be  homesteaded.  Whenever  we 
find  suitable  land  for  agriculture,  it  is  open  for  settlement.  What 
we  have  been  strenuously  avoiding  is  the  putting  a  fellow  on  a  piece 
of  land  that  we  know  he  cannot  be  successful  on.  We  make  an  inves- 
tigation of  the  individual  also  before  we  allow  them  to  homestead 
the  lands.  There  is  no  use  of  giving  a  man  a  contract  if  we  know  he| 
cannot  fulfill  the  same.  This  whole  idea  of  Michigan  selling  hei 
lands  to  get  them  on  the  tax  rolls  has  been  fought  out  here.  The 
organization  of  the  Public  Domain  Commission  was  for  the  purpose | 
of  preventing  that  very  thing.  We  could  put  up  these  lands  in  Mich- 
igan today,  but  it  would  be  the  most  short-sighted  policy  that  Mich- 
igan could  pursue. 

Mr.  Lord:     To  what  extent  have  you  carried  reforestation? 

Mr.  Carton :     I  will  give  you  the  exact  figures.  This  year  we  put  in  aboul 

two  thousand  acres.     We  intended  to  put  in  about  four  thousand 

acres,  but  the  war  broke  out  and  we  turned  in  and  raised  pota 

toes,  etc. 

Mr.  Lord:    What  are  you  going  to  do  with  this  land  that  is  reforesl 

when  you  get  the  forest  started? 
Mr.  Carton :     There  is  nothing  to  do  but  to  protect  it  and  let  it  grow  U] 
Then  will  come  the  removing  of  the  volunteer  crop,  which  will  have 


133 

to  be  removed  to  make  room  for  pines  or  what  is  coming  up.  In  sev- 
eral of  these  reserves  we  have  to  cut  out  the  oak,  etc.,  to  give  room 
to  the  other  things  coming  up. 

Things  have  changed  a  great  deal ;  what  used  to  be  a  liability  to  the 
state  is  now  an  asset.  Timber  that  a  few  years  ago  had  no  value, 
today  has  a  stumpage  value  that  makes  a  nice  profit.  Some  of  the 
timber  has  a  stumpage  value  and  also  a  value  for  chemical  purposes. 

Mr.  Lord:  What  do  you  do  with  the  crops  raised  on  these  agricultural 
lands? 

Mr.  Carton :  We  sold  some  to  the  custodians  on  the  reserves  at  market 
price.  The  balance  we  sold  in  the  market  and  the  money  was  sent  in. 

Mr.  Lord :     Do  you  sell  any  tinlber  at  all  for  fuel  purposes,  etc.  ? 

Mr.  Carton :  Yes,  we  sell  timber  right  along.  We  have  reports  showing 
that.  I  might  also  say  that  we  are  just  closing  up  our  last  transac- 
tion for  the  sale  of  sand  and  gravel. 

Mr.  Hinkley:  Please  briefly  outline  to  the  commission,  the  sixty-year 
plan  of  reforestation. 

Mr.  Carton :  The  sixty -year  plan  is  simply  this ;  it  covers  the  period  in 
which  all  of  the  600,000  acres  of  land  that  Michigan  has,  will  be 
planted.  When  I  say  planted,  I  don't  mean  that  we  plant  every 
acre.  If  we  should  go  on  to  a  tract  of  land  and  three-fourths  of  that 
land  had  a  voluntary  growth  that  was  going  to  have  some  value,  we 
would  not  plant  it,  we  would  simply  plant  in  bare  places  and  later 
on  the  timber  that  was  growing  voluntarily  would  come  to  maturity. 
The  sixty-year  plan  covers  the  completion  of  the  planting  program  of 
the  600,000  acres.  We  have  figured  out  the  rotation  of  cutting  and 
planting,  etc.,  so  as  to  have  a  continuous  revenue  coming  into  the 
state.  I  don't  mean  it  will  be  sixty  years  before  it  commences. 
Perhaps  in  ten  years  we  will  commence  to  remove  the  volunteer  crop. 
Our  sixty-year  plan  shows  how  much  it  will  cost  each  year;  how 
much  money  will  actually  be  spent. 

Mr.  Hinkley :     When  did  you  enter  into  that  sixty-year  plan  ? 

Mr.  Carton :     One  or  two  years  ago. 

Mr.  Hinkley :  Then  you  are  practically  two  years  along.  At  what  time 
do  you  figure  this  plan  will  be  self-sustaining? 

Mr.  Carton :  I  don't  know  just  the  year,  but  can  give  you  a  copy  of  the 
sixty-year  plan. 

Mr.  Hinkley:  Will  it  be  one  hundred  years,  two  hundred  years,  or 
what? 

Mr.  Carton :  In  thirty  or  forty  years,  it  will  commence  to  go  the  other 
way. 

Mr.  Hinkley:  Do  you  think  that  these  seedlings  planted  now  will 
mature  in  forty  years? 

Mr.  Carton :  Some  varieties  of  them.  But  we  must  take  into  considera- 
tion the  great  body  of  growing  timber,  the  timber  which  is  already 
there.  There  is  quite  a  start  of  timber  upon  a  lot  of  these  reserves. 
I  think  during  the  next  year,  or  two  or  three  years,  that  we  will 
commence  to  remove  timber  in  Roscommon  county. 

Mr.  Hinkley:  Why  do  you  remove  this  cover  timber  if  it  is  valuable 
for  seedlings? 

Mr.  Carton :     It  gets  such  a  size  and  then  it  stops.    The  life  of  the  pop- 


134 

lar  is  very  short  as  compared  with  others.     Really,  I  believe  the 
proper  thing  to  do  is  to  remove  while  it  has  a  value, 

Mr.  Hinkley :  Then,  as  I  understand  your  program,  you  expect  that  the 
pine  will  mature  in  fifty  years? 

Mr.  Carton :  I  don't  say  mature ;  but  there  is  a  time  in  the  life  of  tim- 
ber, according  to  the  best  authority  on  forestry,  when  it  can  be  cut  at 
a  benefit  and  more  produced.  There  is  a  time  in  the  reforestation 
business  when  you  can  cut  it  at  a  benefit  and  not  wait  until  it 
matures. 

Mr.  Hinkley:  Do  you  wish  to  state  that  ninety-five  per  cent  of  the 
seedlings  you  plant  grow  up,  and  develop  into  trees? 

Mr.  Carton  :     That  is  asking  me  to  guess. 

Mr.  Hinkley:     What  per  cent  will  come  through? 

Mr.  Carton:  All  that  should  come  through.  If  on  an  average  there 
are  six  hundred  trees  to  the  acre  out  of  the  two  thousand,  it  is  all 
that  we  want ;  the  others  are  put  there  for  the  purpose  of  filler. 

Mr.  Hinkley:     You  figure  that  jack-pine  is  a  good,  valuable  timber? 

Mr.  Carton:  We  figure  it  is  a  valuable  timber  to  do  what  we  want  it 
to  do. 

Mr.  Hinkley:     What  are  the  activities  of  the  State  Forester? 

Mr.  Carton:     He  has  charge  of  all  matters  pertaining  to  reforestation. 

Mr.  Hinkley:     What  has  he  done  during  the  last  thirty  days? 

Mr.  Carton:  Well,  in  the  last  thirty  days,  I  should  imagine  he  was 
hunting  most  of  the  time. 

Mr.  Hinkley:     Well,  the  last  sixty  days? 

Mr.  Carton:  He  has  supervision  of  the  nurseries,  passes  on  all  ex- 
changes of  lands  made  by  examiners,  supervises  all  of  the  custo- 
dians, etc. 

Mr.  Hinkley:     How  many  men  have  you  at  the  Lake  Superior  reserve? 

Mr.  Carton :     I  think  two. 

Mr.  Hinkley:  How  many  acres  in  that  reserve?  Can  two  men  tak< 
care  of  them  ? 

Mr.  Carton :     I  think  there  are  about  119,320  acres. 

Mr.  Hinkley:     How  far  out  is  the  headquarters? 

Mr.  Carton  :     Twenty-five  miles  north  of  Newberry. 

Mr.  Hinkley:  What  appropriation  did  you  get  in  1913  for  prevention 
of  forest  fires  ? 

Mr.  Carton:  110,000.00.  We  got  f 20,000.00  in  1915  and  last  year 
140,000.00. 

Mr.  Hinkley:     Did   the   Public   Domain    Commission   take   any   action  ' 
recently  about  dividing  the  duties  of  the  Forest  Fire  Commissioner  ?  j 

Mr.  Carton :  That  is,  having  the  work  of  the  Forest  Fire  Department  by 
itself,  separating  the  work  from  the  Game  Department? 

Mr.  Hinkley:  No.  I  mean  make  two  fire  divisions,  one  for  the  Upper 
and  one  for  the  Lower  Peninsula. 

Mr.  Carton :  We  took  over  the  Upper  Peninsula  Protection  Association. 
They  abandoned  that  organization  and  we  took  it  over,  including  Mr. 
Wyman.  He  is  in  charge  of  all  the  territory  north  of  the  Straits. 

Mr.  Hinkley:  In  creating  the  two  sub-departments;  where  you  for- 
merly had  one,  you  now  have  two.  Will  you  tell  the  commission  on 
what  grounds  the  Public  Domain  took  that  action? 

Mr.  Carton :     What  do  you  mean,  by  what  authority? 


135 

Mr.  Hinkley:  No;  what  reason  for  the  double  expense  of  two  depart- 
ments ? 

Mr.  Carton:  Mr.  Wyrnan  is  simply  a  warden  under  the  Game  Depart- 
ment, the  same  as  any  other  warden. 

Mr.  Hinkley:     Has  he  an  office  in  the  Upper  Peninsula? 

Mr.  Carton:     I  don't  know. 

Mr.  Hinkley :  The  point  I  want  to  get  at  is  this :  The  Public  Domain 
Commission  created  this  other  department  and  we  want  to  know  the 
reason. 

Mr.  Carton:  I  don't  think  it  is  any  extra  expense,  neither  do  I  think  it 
is  creating  two  departments.  Mr.  Wyman  is  appointed  by  Mr. 
Baird,  the  game  warden,  as  special  assistant.  You  have  to  have 
somebody  up  there  in  the  Upper  Peninsula  to  look  after  everything. 
I  don't  think  there  is  any  added  expense,  and  there  is  no  reason  why 
the  state  should  not  protect  the  Upper  Peninsula  the  same  as  the 
other  divisions  o£  the  state. 

Mr.  Hinkley :  The  point  I  want  to  get  at  is  what  the  commission's  rea- 
sons were. 

Mr.  Carton :  I  don't  think  that  they  had  any  particular  reason,  except 
that  this  organization  was  going  to  discontinue  and  the  state  took 
it  over. 

Mr.  Hinkley :  Was  the  fire  supervision  work  of  the  state  unsatisfactory 
in  the  Upper  Peninsula  before  this  time? 

Mr.  Carton :  No,  it  couldn't  have  been  for  that  reason.  It  was  not  the 
state  organization  that  was  discontinued.  The  work  of  the  state 
organization  was  so  satisfactory  that  they  disorganized  the  Upper 
Peninsula  Protection  Association,  and  the  state  took  that  over. 

Mr.  Thompson:  Mr.  Carton,  the  Public  Domain  Commission  has  taken 
over  the  question  of  fire  protection  for  definite  areas  of  Michigan, 
has  it  not  ? 

Mr.  Carton :  The  fire  protection  to  start  with  is  under  the  Game  War- 
den's Department,  which  is  a  branch  of  this  department  and  the  ter- 
ritory which  they  protect  is  north  of  the  Bay  County  line. 

Mr.  Thompson :  You  have  not  quite  answered  my  question.  Do  you 
take  over  the  fire  protection  in  definite  areas  of  Michigan? 

Mr.  Carton:     No. 

Mr.  Thompson :     Have  you  not  done  that  in  the  Upper  Peninsula  ? 

Mr.  Carton  :  No,  not  any  more  than  anywhere  else.  The  fire  law  covers 
everything  north  of  the  Bay  county  line.  If  you  had  a  private 
organization  in  Alcona  county,  and  you  wanted  to  disband,  and  said 
you  were  to  get  out  of  the  territory,  why,  you  would  have  perfect 
right  to  do  it.  No,  we  don't  take  over  the  fire  protection  for  certain 
territories  as  you  mention. 

Mr.  Thompson :  Are  there  any  organizations  of  any  breadth  covering 
any  of  the  territories  enclosed  in  the  territory  north  of  Bay  county? 

Mr.  Carton :     The  Hardwood  Manufacturing  organization. 

Mr.  Thompson:  Is  there  a  fire  prevention  organization  in  the  Upper 
Peninsula  now? 

Mr.  Carton :     Not  that  I  know  of. 

Mr.  Thompson :  Then  the  state  is  now  carrying  all  the  public  activities 
as  to  fire  prevention  in  the  Upper  Peninsula  ? 

Mr.  Carton :     Yes,  sir. 


136 

Mr.  Thompson :    And  it  is  possible  it  will  do  so  in  the  Lower  Peninsula  ? 

Mr.  Carton:     Yes. 

Mr.  Thompson :  What  proportion  of  the  lands  which  are  so  protected 
belong  to  the  state? 

Mr.  Carton :  A  very  small  amount.  I  would  say  that  north  of  the  Bay 
county  line  there  is  probably  two-thirds  of  the  area  of  the  state, 
24,000,000  acres,  and  in  that  area  we  would  not  have  over  500,000 
acres. 

Mr.  Thompson:  Why  should  the  people  in  that  territory  receive  such 
services  any  more  than  people  down  here? 

Mr.  Carton :  It  is  a  matter  of  state  policy.  It  is  a  well  known  fact  to 
every  student  of  economy  that  when  forests  burn  up  it  is  a  loss  to 
everybody.  The  wood-working  establishments  in  the  lower  part 
of  Michigan  are  as  much  interested  as  those  north  of  Bay  line. 

Mr.  Lord :  Your  point  is  that  all  the  people  are  interested  in  conserva- 
tion and  protection  of  the  forests,  and  that  allthe  people  would  feel 
the  loss,  if  any  occurred? 

Mr.  Thompson:  As  I  gather  your  policy  as  to  Michigan  lands,  you 
believe  that  they  should  be  divided  into  forestry  reserves,  which  pre- 
sumably would  include  lands  not  suitable  for  agricultural  purposes, 
and  the  agricultural  lands  included  in  the  limits  of  those  territories: 
second,  agricultural  lands  not  in  forestry  reserves  which  will  become 
homestead  lands;  third,  miscellaneous  lands  to  be  disposed  of  by 
sale. 

Mr.  Carton :    Yes. 

Mr.  Thompson :  As  I  gather  your  activities,  they  are  office  management, 
including  sale  of  lands  from  this  office;  trespass  activities;  ex- 
changes, fire  prevention ;  question  of  reforestation,  which  includes 
planting  and  sale  of  forestry  products;  immigration;  St.  Clair  flats' 
activities;  sale  of  gravel  and  other  under-ground  materials.  Does 
this  classification  cover  all  of  your  activities? 

Mr.  Carton :     Yes,  that  covers  it  very  well. 

Mr.  Thompson:  What  do  you  estimate  the  cost  or  value  of  land  that 
is  put  into  forestry  reserves,  at  the  time  it  is  put  in  ? 

Mr.  Carton :     I  think  we  give  that  in  our  report. 

Mr.  Thompson:     Can  you,  from  your  own  memory,  state  it? 

Mr.  Carton :     f  1 .50  an  acre. 

Mr.  Thompson :  What  other  uses  would  that  land  have,  other  than  foi 
estry  reserves  or  uses? 

Mr.  Carton:  The  bulk  of  them  would  have  no  other  value,  except  for 
reforestation  work  and,  perhaps,  the  following  out  of  the  plan  of 
making  game  preserves. 

Mr.  Thompson :  What  would  you  estimate  would  be  the  cost  of  seeding 
per  acre,  getting  the  seedlings,  planting,  etc.? 

Mr.  Carton :  As  I  remember,  the  cost  runs  in  the  neighborhood  of  from 
four  to  five  dollars  per  acre. 

Mr.  Thompson :  And  how  long  a  time  would  it  take  the  average  acre  to 
get  to  a  productive  point? 

Mr.  Carton :  That  would  depend  largely  on  the  class  of  timber  that  you 
planted  it  to.  The  class  we  are  planting  is  white  pine,  Norway,  etc. 
Some  of  those  questions  are  more  for  a  forester  to  answer  than  a 


137 

layman,  but  I  think  the  plan  figures  up  about  forty  years'  time 
before  they  come  to  a  stage  where  they  can  be  cut. 

Mr.  Thompson :  So  that  the  average  period  from  the  time  you  would 
undertake  the  planting  to  the  time  it  reaches  its  maturity,  would  be 
about  forty  years? 

Mr.  Carton :     Yes,  I  think  so. 

Mr.  Thompson:  What  would  you  estimate  the  annual  cost  for  that  to 
be? 

Mr.  Carton:  Now,  Mr.  Thompson,  those  are  things  that  have  been  all 
worked  out  by  the  forester,  and  are  a  matter  of  record  by  the  Public 
Domain  Commission.  Those  are  matters  that  trained  foresters  use 
tables,  etc.,  for,  and  could  work  out  according  to  the  accepted  rules 
and  regulations  of  foresters  in  computing  those  things. 

Mr.  Thompson:  Estimates  as  to  the  cost  of  the  care  of  these  reserves, 
fire  protection,  loss  by  reason  of  land  being  withdrawn  from  the  tax 
rolls,  probable  interest  on  investment,  and  the  over-head  cost  during 
that  period. 

Mr.  Carton :     What  do  you  mean  by  loss  of  taxes  ? 

Mr.  Thompson :  If  you  had  sold  the  land  to  individuals  for  clearing,  it 
would  have  been  paying  taxes,  wouldn't  it? 

Mr.  Carton:  You  are  proceeding  on  the  ground  that  the  land  could 
have  been  sold.  A  lot  of  this  land,  Mr.  Thompson,  was  splendid  good 
land  and  some  of  the  land  was  very  poor. 

Mr.  Thompson:  I  appreciate  the  fact  that  most  of  the  land  left  was 
either  remnants  of  poor  land,  or  was  distant  from  the  centers  of 
civilization. 

Mr.  Carton:  We  have  in  our  vaults  detailed  reports  giving  complete 
information  regarding  these  lands,  even  to  the  kind  of  weeds  growing 
on  every  one  of  those  forty-acre  tracts. 

Mr.  Thompson :  What  policy  do  you  adopt  as  to  making  those  matters 
public ;  the  results  of  your  examinations  ? 

Mr.  Carton :  We  have  no  particular  policy  in  making  public  the  reports 
of  examinations,  except  as  they  are  asked  for.  We  give  them  out  in 
a  general  way  in  advising  of  the  activities  of  the  department. 

Mr.  Thompson:  If  an  individual  came  to  you  and  asked  for  activities 
or  records  on  a  certain  parcel  of  land,  is  it  your  policy  to  give  it  out 
or  not  ? 

Mr.  Carton:  I  don't  believe  we  have  ever  denied  anybody.  They  are 
open  records  the  same  as  any  others. 

Mr.  Thompson :  Do  you  do  any  thing  on  developing  of  park  systems  for 
the  state? 

Mr.  Carton:  The  last  legislature  passed  an  act  providing  for  the  pur- 
chase of  land  at  Interlochen  to  be  set  aside  for  a  state  park.  The 
day  is  coming  when  the  State  Highway  Department,  together  with 
the  Public  Domain  Commission,  should  co-operate  and  get  together 
in  making  these  fifty-two  reserves  useful  for  the  public  and  make 
state  parks  out  of  them ;  make  them  available  for  the  people  of  the 
state  and  school  children,  forestry  classes,  etc. ;  make  them  useful 
for  the  fellow  in  the  city,  and  if  we  could  work  out  some  plan  with 
the  Highway  Commission  so  that  these  would  be  connected  up  with 
good  roads,  it  would  be  a  fine  thing. 
Mr.  Lord:  What  supervisory  authority  do  you  have  over  the  property 
on  Mackinac  Island? 


138 

Mr.  Carton:  None  at  all.  It  is  all  under  the  control  of  the  Mackinac 
Island  Park  Commission. 

Mr.  Lord:  Couldn't  you  handle  that  business  without  very  much  addi- 
tional cost;  or  rather,  don't  you  think  as  a  matter  of  good  business 
on  the  part  of  the  state,  that  all  real  property  belonging  to  the  state 
should  be  under  the  control  of  the  Domain  Commission? 

Mr.  Carton:  I  am  a  firm  believer  of  this,  that  there  should  be  a  cen- 
tralization of  all  the  things  pertaining  to  that  particular  work.  That 
is  one  of  the  objects  of  the  Public  Domain  Commission. 

Mr.  Lord :  You  think  that  if-  we  are  to  maintain  a  Public  Domain  Com- 
mission, it  should  have  charge  of  all  state  lands? 

Mr.  Carton:  We  could  handle  it,  there  is  no  question  about  that.  I 
think  the  State  Forester  could  attend  to  all  that. 

Mr.  Lord :  You  say  that  you  sold  the  potatoes  that  you  raised.  I  notice 
that  you  spent  $1,085.00  for  seed  and  sold  only  $795.00  worth;  in 
other  words,  $290.00  less  than  the  seed  cost. 

Mr.  Carton :  I  don't  know  whether  the  potatoes  are  all  sold  or  not.  I 
imagine  that  our  farming  operations  have  not  been  a  great  money- 
making  proposition,  but  it  was  a  move  in  the  right  'direction. 

Mr.  O'Brien :  Does  this  money  from  those  sales  come  to  you  or  direct  to 
the  State  Treasurer? 

Mr.  Carton:  It  all  comes  to  us  and  we  turn  everything  over  to  the 
treasurer. 

Mr.  Lord:  What  is  the  object  of  embodying  in  your  report  all  this 
detail  about  the  proceedings  of  the  meetings  of  your  board? 

Mr.  Carton :     That  is  our  official  record. 

Mr.  Lord:  Yes,  but  of  what  benefit  is  it  to  the  public  to  publish  such 
a  big  book  as  that? 

Mr.  Carton :  My  theory  of  a  record  is  that  it  should  contain  everything 
pertaining  to  our  board  meetings. 

Mr.  Lord:     You  have  to  have  the  record,  but  isn't  it  more  properly  an 
office  record  rather  than  a  public  record?     I  don't  think  it  is  neces- 
sary at  all,  except  for  the  convenience  of  the  board  members. 
What  disposition  do  you  make  of  printed  proceedings? 

Mr.  Carton :  One  copy  is  sent  to  each  of  the  slate  libraries  in  such  states 
as  have  forestry  departments.  Others  sent  to  different  libraries  in 
the  United  States  where  they  are  interested  in  forestry  propositions. 


COMMISSIONER  OF   INSURANCE 

Mr.  Lord :     Mr.  Ellsworth,  you  are  the  Commissioner  of  Insurance  ? 

Mr.  Ellsworth  :     Yes,  sir. 

Mr.  Lord:  Will  you  state  to  the  commission  the  various  activities  of 
your  department,  just  in  a  general  way? 

Mr  Ellsworth :  What  do  you  mean ;  what  we  have  jurisdiction  over  and 
what  our  duties  are? 

Mr.  Lord:     Yes. 

Mr.  Ellsworth:  We  have  jurisdiction  over  all  fire,  life  and  casualty 
companies;  over  all  insurance  of  every  kind.  The  total  number  of 
insurance  companies  reporting  to  this  office  at  the  present  time  are 
six  hundred  and  thirty-nine.  This  department  collected  in  fees  and 


139 

taxes  last  year  over  f  900,000.00.  The  expense  of  operating  the  depart- 
ment was  about  $38,000.00.     This  expense  will  be  increased  some- 
what this  year  by  reason  of  moving  the  office  out  of  the  Capitol 
building.    Also,  in  accordance  with  the  law  passed  by  the  last  legis- 
lature, his  department  has  installed  a  fire  rater,  his  duty  being  to 
investigate  and  report  all  complaints  that  may  come  in  from  over  the 
state  in  reference  to  fire  rates  established.    At  the  present  time  we 
are  employing  one  man  at  a  salary  of  $2,500.00  a  year.    We  are  sup- 
plying him  with  clerical  help  from  the  insurance  office. 
The  Commissioner  of  Insurance  has  complete  supervision  over  all 
insurance  matters  and  we  employ  at  the  present  .time  four  examiners, 
who  are  in  the  field  constantly  examining  the  home  companies  of 
the  state.    Our  Chief  Examiner  makes  an  examination  of  the  leading 
life  and  fire  companies  and  has  two  assistants.    We  keep  one  exam- 
iner constantly  at  work  examining  Farmers'  Mutual  companies.    We 
have  operating  within  the  state  one  hundred  and  fourteen  Farmer's 
Mutual  companies.    Business  in  Michigan  includes  resident  and  non- 
resident companies,  known  as  domestic  and  foreign.    All  insurance 
companies  report  annually  to  this  office  and  these  reports  are  exam- 
ined and  compared  by  the  Actuary  Department. 
The  help  in  this  office  consists  of  one  first  deputy,  one  second  deputy, 
two   stenographers,   license   clerk,   and   assistant,    chief   clerk,   five 
people  in  the  Actuary  Department  and  a  janitor. 
Mr.  Lord:     What  is  the  object  of  having  a  second  deputy? 
Mr.  Ellsworth :     The  law  provides  that  the  Actuary  has  to  be  a  second 
Deputy. 

We  issue  annually  between  thirty  and  thirty-five  thousand  licenses  to 
insurance  agents  and  insurance  representatives  throughout  the  state. 
Every  agent  who  solicits  fire  insurance  or  life  insurance  must  be 
licensed  by  this  department ;  all  companies  operating  within  the  state 
must  first  be  licensed  by  this  department  before  doing  business. 
Mr.  Lord:  What  is  the  required  qualification  of  an  agent  in  order  to 

secure  a  license,  any  standard  at  all? 

Mr.  Ellsworth :  He  must  be  reputable  and  reliable  in  order  to  secure  a 
license.  A  license  is  issued  usually  upon  recommendation  of  the 
company.  We  would  not  appoint  an  agent  for  the  Home  Insurance 
Company  unless  we  sent  to  the  Home  Insurance  Company  to  get  the 
approval.  The  agent  makes  application,  and  we  treat  it  as  a  mutual 
affair. 

Mr.  Lord:  What  fee  do  you  charge  for  the  agent's  license?  What  is 
the  charge  per  license  and  what  was  the  total  amount  you  collected 
last  year  for  such  licenses? 

Mr.  Ellsworth:  Solicitors'  licenses  are  $1.0.00  each,  and  we  issued 
about  860. 

LTnder  our  statute  we  are  supposed,  if  other  states  are  letting  our 
companies  go  free,  to  let  their  companies  go  free  in  Michigan,  but  if 
they  charge,  we  charge  the  same  amount  they  do.  Our  record  shows 
a  total  income  for  the  year  ending  June  30th,  1917,  as  follows  : 
3%  tax  on  gross  premiums  of  fire  and  marine  companies.  .$335,494.46 
2%  tax  on  gross  premiums  of  life  insurance  companies. . .  392,973.26 

2%  tax  on  gross  premiums  of  casualty  companies 110,229.06 

Total  income  from  retaliatory  and  statutory  fees 63,215.10 


140 

(The  last  item  includes  all  income  to  this  office  except  the 
tax  as  prescribed  by  statute). 

Mr.  Lord:  Following  this  up,  1  would  like  to  ask  if  the  specific  tax  paid 
by  these  various  classes  of  insurance  companies  is  all  the  tax  they 
pay;  they  are  not  subject  to  any  other  tax,  are  they? 

Mr.  Ellsworth:     Not  unless  they  own  real  estate. 

The  Commissioner  of  Insurance   is  also  Ex-Official   Fire  Marshal. 
We  have  eight  persons  employed  in  that  department.     The  work  of 
this  department  is  largely  the  inspection  of  theatres,  school  houses 
and  churches,  and  all  public  buildings ;  to  see  that  all  buildings  com- . 
ply  with  the  requirements  of  the  state  statutes. 

All  fires  occurring  throughout  the  state  are  reported  by  the  fire 
chiefs  to  this  department,  and  these  fire  chiefs  receive  a  fee  of  25 
cents  for  every  fire  reported.  This  report  specifies  the  cause  of  the 
fire,  if  known,  extent  of  damage,  value  of  the  property,  the  amount 
of  insurance  carried;  also  fatalities,  if  any  should  occur.  A  record 
of  these  reports  is  kept  in  this  office.  A  fee  of  #10.00  is  charged  for 
the  inspection  of  every  theatre;  none  is  made  for  other  buildings 
inspected. 

The  number  of  theatres  inspected  each  year  is  about  six  hundred. 
These  are  inspected  twice  a  year  and  they  pay  a  $10.00  fee  for  each 
inspection. 

Mr.  Lord:     Are  those  fees  included  in  the  #03,000.00? 

Mr.  Ellsworth :     No,  they  are  included  in  the  Fire  Marshal's  statement. 

Mr.  Lord :  Isn't  it  a  fact,  Mr.  Ellsworth,  that  the  Labor  Department  per- 
forms practically  the  same  duties  in  regard  to  inspections? 

Mr.  Ellsworth:     Only  on  factories. 

Mr.  Lord:     Don't  they  inspect  hotels? 

Mr.  Ellsworth :     Yes,  I  think  they  do. 

Mr.  Lord:  A  large  part  of  work  by  way  of  tire  inspection  is  duplicated 
by  the  Labor  Commissioner,  I  believe. 

Mr.  Ellsworth  :  That  really  ought  to  belong  to  one  department.  I  think 
that  would  be  the  proper  taring  to  do,  either  the  Fire  Marshal's 
Department  or  the  Labor  Department. 

Mr.  Lord:  Which  department  do  you  think  ought  to  do  this?  What 
work  would  your  Fire  Marshal  have  to  do  if  the  inspections  were  all 
placed  in  the  Labor  Department? 

Mr.  Ellsworth:  We  would  still  have  jurisdiction  over  all  fires  occur- 
ring. This  year,  our  inspectors  have  been  very  busy  in  the  conserva- 
tion work ;  in  inspecting  theatres,  mills  and  food  supply,  and  storage 
places  throughout  the"  state. 

Mr.  Lord :  Isn't  it  a  fact  that,  oftentimes,  you  will  find  an  inspector 
from  the  Labor  Department  and  an  inspector  from  the  Fire  Marshal's 
Department  in  the  same  town ;  one  inspecting  theatres  and  the  other 
factories  and  hotels,  and  isn't  it  a  fact  that  the  same  man  could  do 
all  the  work? 

Mr.  Ellsworth:  That  might  happen,  and  I  should  think  some  of  that 
work  could  be  done  by  the  same  man. 

Mr.  Thompson:  Logically,  under  whose  department  should  those  come, 
the  Labor  Department  or  yours? 

Mr.  Ellsworth:     Don't  know  as  I  can  answer.     Where  there  are  other 


141 

factors  involved  as  with  factories  and  hotels,  possibly  the  inspection 
of  those  buildings  ought  to  be  with  the  Labor  Department, 
r.  Thompson :  Following  the  question  of  Mr.  Lord ;  where  you  are 
sending  an  inspector  to  a  factory  in  reference  to  the  fire  hazard,  and 
they  would  also  have  a  man  there  inspecting  other  conditions, 
couldn't  you  get  a  man  competent  to  handle  both  inspections? 

Mr.  Ellsworth :  I  should  think  so.  The  only  thing  it"  is  in  two  depart- 
ments. 

Mr.  Lord:  It  would  not  only  eft'ect  a  higher  degree  of  efficiency  in  the 
conduct  of  the  work,  but  also  a  larger  degree  of  economy  in  that  it 
would  save  costs  to  the  taxpayers. 

Mr.  Lord :  Would  you  be  willing  to  have  that  work  transferred  to  the 
Labor  Department  or  do  you  prefer  to  have  their  work  transferred 
here;  I  mean  the  inspections? 

Mr.  Ellsworth:  I  don't  know  as  it  is  up  to  me  to  say.  We  would  be 
very  glad  to  get  rid  of  this  factor  of  it,  if  you  see  fit  to  turn  it  over 
to  the  Labor  Department.  In  fact,  the  whole  fire  marshal's  office 
is  an  additional  work,  it  possibly  should  be  a  department  by  itself 
and  this  work  of  fighting  the  fire  loss  in  this  state  could  be  made 
possibly  more  effective.  Some  effort  should  be  made  all  the  time  to 
reduce  the  fire  loss. 
r.  Lord  :  Where  do  you  think  that  should  go? 

Mr.  Ellsworth :  Don't  know  as  I  am  prepared  to  say.  We  have  worked 
at  it  as  hard  as  we  could  this  year  to  keep  down  our  fire  losses. 

Mr.  Lord  :  What  was  the  income  of  the  Fire  Marshal's  Department  last 
year? 

Mr.  Ellsworth:  $  15,000.00  was  appropriated  for  the  Fire  Marshal's 
Department  and,  in  addition,  they  are  allowed  to  use  any  fees  thej 
collect,  and  turn  back  the  excess  into  the  State  Treasury. 

Mr.  Lord :  Don't  you  think  it  would  be  an  improvement  to  have  that 
department's  expenses  paid  entirely  by  appropriation  and  all  fees 
turned  into  the  general  fund? 

Mr.  Ellsworth :  We  always  have  something  to  turn  back  and  will  have 
something  this  year.  We  never  are  able  to  tell  just  what  the  income 
of  that  office  is  going  to  be. 

Fees  Collected. 
Total  fees  for  January,  February,  March,  April,  May  and 

June   * - 17,100.00 

Cash  on  hand  January  1st,  1917 7,219.67 


114,319.67 
Disbursements 9,839.58 


Balance |4,480.09 

We  have  made  eighty-seven  investigations  of  incendiary  fires;  have 
had  nearly  one  hundred  complaints;  thirty-five  arrests  and  ten  con- 
victions up  to  date. 

Mr.  Lord  :  Do  you  know  of  any  way  by  which  you  could  increase  the 
efficiency  of  your  department,  or  is  it  satisfactory? 

Mr.  Ellsworth :  Well,  sir,  I  don't  know  of  any  way  we  can  increase  the 
efficiency  of  this  department.  It  is  efficient  now.  The  only  improve- 


142 

ment  that  I  can  recommend  is  a  saving  on  the  printing  of  our  report 
The  reports  in  this  office  have  been  costing  somewhere  from  five  to 
six  thousand  dollars  a  year,  and  this  department  has  been  publishing 
one  thousand  of  the  Fire  and  Marine  reports  and  one  thousand  of  th( 
Life.  We  expect  to  cut  that  expense  in  half.  We  expect  next  year 
to  get  out  one  volume  instead  of  two.  All  we  can  do  this  year 
to  approve  the  bills  contracted  for  by  the  former  commissioner. 

Mr.  Ellsworth :  I  did  have  in  mind  recommending  a  report  that  woul< 
give  detailed  information  as  to  Michigan  companies  and  a  synopsis 
of  the  operations  of  foreign  companies,  but  this  might  be  unsatisfac 
tory.  We  have  concluded,  therefore,  that  we  can  give  the  detaile< 
information  by  putting  it  in  table  form,  which  will  give  one  volume 
instead  of  two  and  reduce  the  expense  at  least  one-half. 

Mr.  Lord:     Of  what  benefit  is  so  much  detail  in  your  reports? 

Mr.  Baxter:  We  have  lots  of  calls  for  it;  from  insurance  agencies  par- 
ticularly. 

Mr.  Ellsworth:  They  feel  that  their  payments  are  liberal  and  that  they 
ought  to  be  furnished  this  information.  The  department  has  always 
endeavored  to  give  them  as  complete  information  as  possible. 

Mr.  Lord:  I  think  it  is  important  that  you  have  this  information  on  file 
in  your  office,  where  it  can  be  given  if  they  desire  it,  but,  because  of 
the  late  printing  of  these  reports,  and  by  the  time  your  report  is  out 
of  press  and  ready  for  distribution,  the  figures  it  contains  are  of 
little  value. 

Mr.  Ellsworth:  I  agree  with  you  that  the  delay  is  very  often  great  and 
there  should  be  some  provision  made  to  get  our  reports  out  sooner. 

Mr.  Lord:  Where  is  there  any  more  sense  in  publishing  the  detailed 
statements  of  insurance  companies,  than  there  would  be  in  the  Sec- 
retary of  State  publishing  detailed  statements  of  the  manufacturing 
companies  that  report  to  that  office? 

Mr.  Ellsworth:  The  insurance  companies  are  dealing  with  a  fund,  that 
belongs  to  the  masses.  The  fire  insurance  companies  are  liable  to 
the  people  for  these  losses  and  when  you  place  your  insurance  with 
an  insurance  company,  you  might  want  to  know  something  as  to  the 
nature  of  investments;  what  their  assets  were  invested  in. 

Mr.  Lord :  In  what  other  way  could  you  increase  the  efficient  conduct 
of  this  department,  other  than  by  cutting  down  the  size  of  this 
report  ? 

Mr.  Ellsworth:  I  had  already  figured  on  reducing  the  annual  report 
by  putting  it  up  in  table  form.  This  year  we  reduced  the  number 
and  can  still  reduce  it  two  hundred  copies.  This  department  issues 
a  bulletin  every  two  weeks  and  we  mail  nine  hundred  copies.  We 
have  also  this  year  mailed  notices  at  several  times  to  the  Fire 
Chiefs  throughout  the  state  calling  attention  to  the  fire  conditions. 
We  have  also  mailed  notices  to  the  mayors  of  cities  and  presidents  of 
villages  with  reference  to  fire  and  water  conditions,  and  have  had 
many  compliments  from  the  government  with  reference  to  the  fire 
activities  in  Michigan. 

This  department  also  has  supervision  of  the  Accident  Fund,  which 
insures  on  workmen's  compensation.  This  department  collected 
last  year  in  premiums  about  1110,000;  and  we  have  at  the  present 
time  a  catastrophe  reserve  of  approximately  $50,000.00. 


143 

Mr.  Lord :  Will  you  state  to  us  your  method  of  procedure  in  licensing 
companies  who  want  to  transact  business  in  Michigan  ? 

Mr.  Baxter :  We  first  require  from  the  company  a  certified  copy  of  the 
report  of  examination  made  by  its  own  department  (the  insurance, 
department  of  its  own  state),  and,  if  this  report  is  satisfactory, 
blanks  are  forwarded  and  the  company  submits  a  copy  of  its  last 
annual  statement  and  other  papers  required  by  the  laws  of  this 
state.  After  everything  is  in  order,  and  the  company  complies  in 
every  way  with  the  laws  of  this  state,  it  is  admitted  and  a  certificate 
of  authority  is  issued. 

Mr.  Lord:  Don't  you  cause  an  examination  of  the  company  to  be  made 
before  permitting  it  to  do  business  in  Michigan? 

Mr.  Baxter:  We  accept  the  report  of  the  insurance  department  of  that 
state,  except  under  certain  conditions ;  Wisconsin  requires  our  com- 
panies to  be  examined  and  we  have,  in  sometimes  past,  made  the 
same  requirement. 

Mr.  Lord:  Do  you  accept,  outside  of  that,  the  report  of  the  Commis- 
sioner of  Insurance  from  every  state  where  a  certain  company  wants 
to  do  business  in  Michigan? 

Mr.  Baxter :     We  do. 

Mr.  Lord :     Do  you  think  it  is  safe  ? 

Mr.  Baxter:  Yes;  we  know  in  a  way  the  standard  of  the  departments 
and  are  governed  a  good  deal  by^that  in  the  admission  of  the  com- 
pany. So  far  as  I  know,  in  all  the  time  I  have  been  here,  we  have 
always  relied  on  the  home  department. 

Mr.  Lord :     You  do  occasionally  make  examination  ? 

Mr.  Baxter:  The  only  case  I  know  of  where  this  department  has  done 
anything  like  that  was  in  the  case  of  a  casualty  company  where  its 
showing  was  not  good,  so  this  department  caused  an  examination  to 
be  made. 

Mr.  Lord:  So  there  have  been  times  when  the  examination  made  by  the 
state  office  from  which  the  company  comes  was  not  a  good  exam- 
ination ? 

Mr.  Baxter :     Only  one  instance  that  I  know  of. 

Mr.  Lord :  What  do  you  do  in  the'  matter  of  domestic  insurance  com- 
panies? Do  you  license  those? 

Mr.  Baxter:     Yes;  upon  examination.    We  examine  them. 

Mr.  Lord :     The  point  I  want  to  make  is  11    f  domestic  com- 

panies which  want  to  transact  business  in  Michigan,  but  do  not 
examine  the  foreign  companies.  What  do  you  do  in  case  of  com- 
panies that  apply  to  do  business  in  Michigan  from  foreign  nations? 

Mr.  Baxter :  They  make  a  certain  state  in  the  United  States  their  state 
of  entry,  and  make  statutory  deposit  in  that  state.  In  the  matter  of 
deposit,  capital  is  usually  of  the  same  amount  as  capital  required  of 
domestic  companies. 

Mr.  Lord:  Where  a  deposit  is  made  with  some  state,  do  you  require 
a  similar  deposit  in  Michigan  ? 

Mr.  Baxter:  We  do  not  unless  as  a  retaliatory  means.  If  Indiana 
would  require  it  of  us,  we  would  do  the  same  by  them. 

Mr.  Lord:     What  security  would  that  be  to  citizens  of  Michigan? 

Mr.  Baxter :     It  is  for  all  policyholders  alike. 

Mr.  Ellsworth :     We  expect  the  local  commissioner  to  look  after  the  com- 


144 

panies  of  his  own  state,  and  with  the  co-operation  between  the  coi 
missioners  of  the  different  states,  we  are  getting  excellent  results 
Should  we  hear  of  any  company  that  is  lacking  in  its  payments,  01 
where  we  have  any  information  that  anything  is  wrong,  we  imm< 
diately  insist  on  examination  of  that  company. 

Mr.  Lord:  Mr.  Ellsworth,  I  wish  you  would  state  to  the  Budget  Coi 
mission,  the  benefits  derived  by  the  people  of  the  state  by  the  oper; 
tion  of  this  department. 

Mr.  Ellsworth :     This  department  stands  between  the  people  of  the  stal 
and  the  companies.     It  is  our  duty  to  see  that  the  people  are  pr 
tected  and  to  see  that  the  companies  comply  with  the  statutes 
this  state. 

Mr.  O'Brien:     Are  "reciprocal  underwriters"  permitted  to  do  busim 
in  Michigan? 

Mr.  Ellsworth:     Yes,  sir. 

Mr.  O'Brien  :     Under  what  regulations  ? 

Mr.  Ellsworth  :     The  regulations  are  somewhat  unsatisfactory. 

Mr.  O'Brien:     Will  you  please  define  to  the  commission  the  assets  of  a 
reciprocal  underwriter  ? 

Mr.  Ellsworth :  It  is  a  specie  of  the  mutual  company,  not  necessarily  a 
domestic  company.  The  state  permits  them  to  operate  under  certaii 
conditions.  They  have  to  have  subscriptions  amounting  to  $25,( 
These  companies  must  have  at  least  one  hundred  separate  risks  aggi 
gating  not  less  than  one  and  one-half  million  dollars,  as  represented 
by  executed  contracts  or  honafidc  applications.  We  have  the  privi- 
lege of  examining  any  company  doing  business  in  this  state,  but  the 
National  Association  of  Insurance  Commissioners  have  a  committee 
and  we  operate  through  that  committee.  We  examine  our  own  resi- 
dent companies  once  every  year. 

Mr.  O'Brien :     In  your  report,  your  receipts  show  that  the  fire  insurance 
companies  paid  into  your  department  something  over  $335,000.00, 
which  is  practically  one-third  of  the  receipts  of  the  annual  business. 
Your  disbursements  are  f 37,000.00;  assuming  the  same  proportion, 
you  pay  out  for  that  department  approximately  |1 2,000.00,  leaving! 
a  net  profit,  you  might  call  it,  from  the  fire  insurance  companies,  of 
1323,000.00.     Now,  in  your  opinion,  which  I  would  like  to  have  you  | 
state  as  briefly  as  possible,  don't  you  think  that  $323,000.00,  which, 
in  a  way,  enters  into  the  payment  of  the  rate  by  your  taxpayers  of 
Michigan,  could  be  used  in  the  enforcement  of  building  laws,  whereby  I 
the  fire  loss  could  be  materially  reduced,  giving  direct  benefit  to  thej 
insuring  public  of  Michigan  ? 

Mr.  Ellsworth :  I  am  not  in  a  position  at  this  time  to  make  any  recoi 
mendations  as  to  the  course  to  be  pursued  to  secure  a  reduction  ii 
the  fire  loss,  but  I  do  think  the  subject  should  be  investigated  thor- 
oughly and  some  recommendation  should  be  made  along  that  line,i 
as  our  fire  losses  will  be  in  the  vicinity  of  eight  million  dollars. 

Mr.  Lord:     Will  you   tell   us   briefly   about   your   Industrial   Accidem 
Fund? 

Mr.  Ellsworth :     This  department  has  jurisdiction  over  a  fund  known 
the  Accident  Fund.    It  permits  citizens  throughout  the  state  to  sub- 
scribe to  this  fund  to  protect  themselves  or  their  companies  01 
workmen's  compensation.     By  this  law,  all  state  institutions  ai 


145 

compelled  to  become  subscribers  to  this  fund,  and  we  have  a  total 
membership  of  about  nine  hundred  and  fifty  at  the  present  time. 
This  fund,  collected  last  year  in  premiums,  is  approximately 
1116,000.00,  and  has  at  the  present  time  a  catastrophe  reserve  of 
about  $50,000,00.  The  fund  is  popular,  is  growing  and  the  mem- 
bership is  increasing  daily.  This  is  virtually  a  mutual  insurance 
company,  and  the  fund  pays  all  operating  expenses;  no  portion  of 
the  expense  of  the  operation  of  this  business  is  paid  by  the  state. 
The  rates  of  insurance  are  below  the  stock  company  rates,  between 
15  and  30  per  cent,  which  is  a  saving  to  the  manufacturers  and 
persons  desiring  protection.  All  premiums  collected  are  turned  over 
by  the  manager  of  the  fund  to  the  State  Treasurer,  the  Insurance 
Commissioner  giving  a  bond  of  $50,000.00  for  this  purpose.  The 
manager  of  the  fund  gives  the  commissioner  a  bond  back  in  the  sum 
of  $10,000.00  which  is  a  private  matter.  This  institution  has  on 
hand  in  municipal  bonds  about  $130,000.00  worth,  and  has  recently 
purchased  $15,000.00  worth  of  Liberty  Loan  Bonds. 

Mr.  Lord:     Who  makes  the  investments? 

Mr.  Ellsworth :     The  treasurer  and  myself. 

Mr.  Lord :     So  that  it  is  really  all  under  your  direct  supervision  ? 

Mr.  Ellsworth :  There  is  one  thing  right  there  that  is  confusing.  We 
are  given  the  name  of  "Accident  Fund" ;  the  claims  against  the 
Accident  Fund  are  heard  by  the  Industrial  Accident  Board.  This 
board  treats  the  Accident  Fund  the  same  as  any  insurance  company, 
and  this  insurance  department  examines  the  Accident  Fund  the 
same  as  we  do  any  insurance  company. 

Mr.  Lord:  So  that  the  Industrial  Accident  Board  really  makes  the 
award  and  you  pay  the  money? 


COMMISSIONER  OF  LABOR 

Mr.  Kirby,  Chief  Assistant,  and  Fred  W.  Castator,  Deputy  Com- 
missioner, present. 

Mr.  Thompson:  Mr.  Kirby,  will  you  tell  us  of  the  various  activities  of 
your  department? 

Mr.  Kirby:  The  inspection  of  factory  work  shops,  public  buildings, 
stores,  etc.,  and  to  gather  statistics  relating  to  those  institutions. 
The  inspection  of  factories  is  to  see  as  to  the  safety  for  the  people 
employed  therein,  protecting  the  life  and  welfare  of  the  workers,  to 
ascertain  and  remedy  any  defects  in  the  sanitary  conditions  of  the 
factories  and  stores;  to  enforce  the  provisions,  in  a  general  way,  of 
the  labor  law;  and  also  to  inspect  coal  mines,  and  boats  of  inland 
waters  of  the  state.  We  inspect  the  condition  of  the  boats  and  issue 
licenses. 

Mr.  Thompson :     Name  the  various  classes  of  buildings  you  inspect. 

Mr.  Kirby:     Public  buildings,  such  as  school  houses,  stores,  etc.' 

Mr.  Thompson:  Take  up  the  character  of  your  inspections,  what  you 
have  to  see,  what  has  to  be  done  as  to  each  class  of  buildings. 

Mr.  Kirby :  Stores,  public  buildings,  bank  buildings,  school  houses,  etc. ; 
they  must  be  inspected  as  to  fire  safety,  see  that  they  are  safe  to  work 
in  and  stay  in,  and  that  they  are  provided  with  proper  exits  and  fire 
escapes. 


146 

Mr.  Thompson:     To  what  extent  do  you  examine  as  to  fire  protection? 
Mr.  Kirby:     While  the  law  is  not  specific  in  that  matter,  it  only  requires 

tkat  they  have  proper  fire  escapes,  in  most  cases  the  fire  inspector 

sees  that  a  fire  drill  is  used  in  schools. 

Mr.  Thompson:     What  is  the  character  of  your  inspection  of  factories? 
Mr.  Kirby:     To  see  that  all  machinery  is  properly  guarded  and  that  all 

place's  that  might  be  dangerous  to  the  worker  are  properly  guarded. 
Mr.  Thompson:     Do  you  make  fire  inspection  there  as  well? 
Mr.  Kirby:     No,  that  is  under  the  Fire  Marshal's  Department. 
Mr.  Thompson:     You  pay  no  attention  to  tire  inspection? 
Mr.  Kirby:     Oh,   yes;   we   pay   some   attention   to   that,   but   it   is   not 

required  by  law. 

Mr.  Thompson:     What  other  classes  do  you  inspect  as  to  these  matters? 
Mr.  Kirby:     Well,  that  covers  about  all  the  buildings  in  the  state;  we 

inspect  all  with  the  exception  of  private  homes. 

Mr.  Thompson:     Do  you  have  anything  to  do  with  the  housing  laws? 
Mr.  Kirby:     I  think  the  Health  Department  has  something  to  do  with 

that. 

Mr.  Thompson:     The  matter  of  egress  is  regarded  as  important? 
Mr.  Kirby:     Yes,  sir. 

Mr.  Thompson:     How  are  these  inspections  carried  on? 
Mr.  Kirby:     By  factory  inspectors  commissioned  by  the  Commissioner 

of  Labor. 

Mr.  Thompson:     How  many  have  you? 
Mr.  Kirby :     Wre  have  eighteen. 

Mr.  Thompson:     How  do  you  divide  up  as  to  territory? 
Mr.  Kirby:     There  is  no  basis  of  division  really.    We  place  about  twelve 

or  fourteen  hundred  factories  under  each  man. 
Mr.  Thompson :     So  you  divide  by  factories  ? 
Mr.  Kirby :     Yes,  sir. 

Mr.  Thompson:     How  do  you  find  out  the  number  of  factories? 
Mr.  Kirby:     By  inspection. 
Mr.  Thompson:     Is  there  any  requirement  that  the  owner  of  a   factory 

must  report  to  you  ? 

Mr.  Kirby:     No,  sir.    We  have  to  look  them  up. 
Mr.  Thompson:     What  do  you  do  as  to  hours  of  labor? 
Mr.  Kirby:     We  enforce  the  fifty-four  hour  law  for  women  and  for  boys 

under  eighteen  years  of  age. 
Mr.  Thompson  :     How  do  you  do  that  ? 
Mr.  Kirby:     By  prosecution  and  by  issuing  orders. 
Mr.  Thompson:     What   character   of   inspectors    do    you    use   for    that 

purpose  ? 

Mr.  Kirby:     Factory  inspectors. 
Mr.  Thompson :     Do  you  use  women  inspectors  ? 
Mr.  Kirby :     We  have  some  women  inspectors. 
Mr.  Thompson  :     How  many  ? 
Mr.  Kirby:     We  have  three. 
Mr.  Thompson :     You  have  a  total  of  eighteen  inspectors,  three  of  which 

are  women? 

Mr.  Kirby:     No;  eighteen  men  and  three  women  inspectors. 
Mr.  Thompson  :     What  reports  do  you  receive  from  these  inspectors? 
Mr.  Kirby:     Their  daily  report  of  inspection. 


147 

Mr.  Thompson :     What  control  do  you  have  over  conditions  of  labor 
except  as  to  fire  escapes,  fire  protection,  sanitary  protection  and 
safety  as  to  machinery? 
Mr.  Kirby :     That  is  about  as  far  as  our  jurisdiction  extends.    We  have 

nothing  to  do  with  fixing  wages  or  anything  like  that. 
Mr.  Thompson:     How  about  the  minimum  wage? 
Mr.  Kirby:     We  have  nothing  to  do  with  that. 
Mr.  Thompson :     How  is  that  disposed  of  ? 

Mr.  Kirby:  There  was  a  minimum  wage  commission  appointed  in  1913 
and  they  made  a  report  to  the  1915  legislature,  but  I  don't  believe 
any  action  was  taken. 

Mr.  Thompson:  What  other  things  ought  to  be  done  by  your  depart- 
ment as  to  labor? 

Mr.  Kirby:     Well,  there  are  many  things.     We  believe  in  a  minimum 
wage  law,  and  also  in  regulating  the  hours  that  men  should  be 
employed  as  well  as  women.    Those  are  the  most  important. 
Mr.  Thompson :     What  do  you  do  as  to  mines  ? 
Mr.  Kirby :     We  have  jurisdiction  over  coal  mines  only,  not  copper  mines. 

They  are  taken  care  of  by  local  inspectors. 
Mr.  Thompson:     What  is  your  inspection  as  to  coal  mines? 
Mr.  Kirby:     All  phases  of  coal  mining,  below  ground  and  above,  as 
well.    The  inspectors  must  see  that  the  rooms  are  properly  ventilated 
and  that  the  runaways  are  in  proper  and  safe  condition. 
Mr.  Thompson:     What  do  you  do  as  to  boats? 
Mr.  Kirby :     The  inspectors  inspect  boats  as  to  safety,  and  see  that  they 

have  the  proper  number  of  life  preservers. 
Mr.  Thompson :     Is  yours  the  only  inspection  in  the  state? 
Mr.  Kirby :     There  is  a  national  inspection,  but  we  have  just  the  inland 

waters  of  the  state. 

Mr.  Thompson:     How  many  boats  do  you  have  to  inspect? 
Mr.  Kirby :     We  have  about  two  hundred  in  Michigan. 
Mr.  Thompson :     How  many  inspectors  ? 

Mr.  Kirby :  One.  We  have  also  connected  with  this  department  ten 
free  employment  bureaus  that  are  located  in  the  state.  It  is  their 
duty  to  find  employment  for  men  out  of  employment  and  find  workers 
for  manufacturers  who  seek  men. 

Mr.  Thompson:     You  become  a  clearing  house  for  labor? 
Mr.  Kirby:     Absolutely. 

Mr.  Thompson:     In  what  towns  do  you  have  employment  agencies? 
Mr.  Kirby :     Bay  City<  Battle  Creek,  Detroit,  Jackson,  Flint,  Kalaniazoo, 

Saginaw,  Grand  Rapids,  Muskegon  and  Lansing. 
Mr.  Thompson :     None  in  the  Upper  Peninsula  ? 
Mr.  Kirby :     No,  sir. 
Mr.  Thompson :     Why  not  ? 

Mr.  Kirby :  Well,  when  the  legislature  gave  us  power  to  establish  these 
agencies  or  bureaus,  they  limited  us  as  to  appropriation,  and  we 
never  have  had  money  enough  to  have  one  up  there.  It  is  my  belief 
that  we  should  have. 

Mr.  Thompson :     What  benefit  is  that  to  the  public  ? 
Mr.  Kirby:     Well,  it  is  a  great  benefit.    For  instance,  during  the  months 
of  July  and  August,  this  year,  we  were  able  to  send  to  the  farmers 


148 

from  our  free  employment  bureaus  between  four  and  five  thousan 
workers. 

Mr.  Thompson:  To  what  extent  does  your  employment  bureau  help  th 
farmers  ? 

Mr.  Kirby:  That  is  pretty  hard  to  say.  We  have  always  been  able  t 
take  care  of  them  when  they  made  request.  We  have  been  able  t 
send  out  very  good  and  efficient  help  from  these  bureaus. 

Mr.  Thompson:  How  many  men  do  you  find  employment  for,  or  act  a 
clearing  house  for,  during  the  year? 

Mr.  Kirby:     In  1010,  a  total  of  104,048  men  and  women. 

Mr.  Thompson:     What  is  the  character  of  the  statistics  you  gather? 

Mr.  Kirby:     We  gather  statistics  from  every  manufacturing  establish 
ment  of  the  state  that  is  inspected.    They  are  gathered  and  publish 
in  the  aggregate  and  averages.    For  instance,  all  the  superintenden 
and  foremen,  office  help,  etc.,  the  skilled  workers,   both   men   an 
women,  and  others  besides  skilled  workers,  those  between  sixtee 
and  eighteen  years  of  age,  all  those  between  fourteen  and  fifteen 
years  of  age,  and  all  the  female  workers  in  factories  and  work  shops. 
All  this  is  gathered,  tabulated  and  put  together  showing  the  aggre- 
gate and  average. 

Mr.  Thompson :  The  only  class  of  labor  you  endeavor  to  cover  is  con 
nected  with  factories? 

Mr.  Kirby:     Yes,  and  stores,  restaurants,  hotels,  etc. 

Mr.  Thompson:     Your  inspectors  collect  these  details? 

Mr.  Kirby:     Yes  sir. 

Mr.  Thompson:     Could  they  not  be  as  well,  collected  by  correspondence? 

Mr.  Kirby :     No   sir,  they  could  not. 

Mr.  Thompson:     Why  not? 

Mr.  Kirby:     They  pay  no  attention  to  you. 

Mr.  Thompson:     Could  you  not  enforce  a   penalty? 

Mr.  Kirby :     If  we  had  the  power. 

Mr.  Thompson:     Would  that  be  cheaper? 

Mr.  Kirby:     I  think  not.     They  have  to  visit  the  factories  as  to  safety. 

Mr.  Thompson  :     Of  what  value  to  the  people  are  those  statistics? 

Mr.  Kirby:  It  shows  the  people  the  average  daily  wages  paid  in  every 
city,  and  from  the  number  of  requests  we  have  for  our  report,  it 
would  seem  that  people  are  interested. 

Mr.  Thompson:  What  number  of  reports  do  you  publish  in  a  year  and 
circulate? 

Mr.  Kirby:  Sometimes  five  thousand.  The  law  limits  us  to  that  many. 
Last  year  it  was  only  thirty-one  hundred. 

Mr.  Thompson:  What  class  of  people  are  the  bulk  of  such  statistics 
valuable  to? 

Mr.  Kirby:     Laboring  people. 

Mr.  Thompson:     How  many  look  over  them? 

Mr.  Kirby:  Could  not  tell  you.  Different  unions  call  for  them  to  be 
given  to  their  members.  I  couldn't  tell  you  how  many  look  at  them ; 
couldn't  give  you  an  estimate. 

Mr.  Thompson:  In  your  judgment,  could  your  report  be  curtailed  in 
any  way,  with  fairness  to  the  people  of  the  state  and  still  give  them 
the  information  ? 

Mr.  Kirby :    We  have  cut  it  down  as  much  as  we  possibly  could. 


149 

Thompson  :  Would  it  be  fair  to  reduce  the  statistics  in  your  report  ? 
Kirby:  It  would  be  fair  if  we  could  do  it  by  law.  The  only  pub- 
lication we  give  is  required  by  law. 

Mr.  Thompson:  Assuming  that  protection  could  be  given  as  to  people 
in  buildings,  as  to  fire  risk,  inspection  as  to  schools,  sanitary  con- 
ditions, and  safety  of  people  employed,  what  reasons  are  there  fo* 
the  labor  department  ? 

Kirby :  There  has  to  be  some  department  to  enforce  the  labor  laws 
and  to  see  that  the  laboring  man  is  furnished  a  safe  place  to  work. 
Without  the  assistance  of  the  labor  department,  you  can  readily 
see  where  the  manufacturer  would  become  negligent  in  guarding 
machinery ;  they  also  would  not  pay  much  attention  to  the  hours  of 
labor  for  women  and  children. 

Thompson :  Have  you  anything  else  you  want  to  put  on  record  as  to 
your  department? 

Mr.  Kirby:  No,  that's  about  as  concise  and  clear  a  statement  as  could 
be  made,  I  believe. 

Mr.  Thompson:     How  many  prosecutions  a  year  do  you  make? 

Mr.  Kirby:  A  good  many.  We  average  all  the  way  from  one  hundred 
to  two  hundred  prosecutions. 

Mr.  Thompson :     You  feel  that  the  labor  laws  are  fairly  well  obeyed  ? 

Mr.  Kirby:  Yes  sir,  they  are.  The  larger  industries  of  the  state  are 
seeking,  and  have  sought  for  years,  to  comply  with  all  the  provisions 
of  the  labor  laws.  The  ones  we  have  the  most  trouble  with  are 
smaller  ones  where  they  employ  few  people.  The  larger  industries 
of  the  state  seek  to  obey  the  labor  laws. 

Thompson :  Does  the  Workmen's  Compensation  Law  affect  this 
department? 

Mr.  Kirby:  Yes,  it  has.  The  Workmen's  Compensation  Law  has  tended 
to  make  the  factories  observe  and  keep  their  plants  in  a  safer  condi- 
tion than  ever  before. 

Thompson :  Can  you  conceive  of  any  plan  by  which  inspections 
made  by  your  department,  the  health  department,  dairy  and  food 
department,  and  fire  marshal's  department,  could  be  either  consoli- 
dated or  correlated,  to  accomplish  the  same  results? 

Mr.  Kirby:  We  overlap  on  fire  protection,  and  as  to  certain  industries 
with  the  dairy  and  food  department.  For  instance,  like  the  butter 
and  cream  business.  Of  course,  the  dairy  and  food  department  only 
inspects  sanitary  conditions  in  the  creamery,  while  we  look  after 
the  machinery  and  safety. 

Mr.  Thompson :  Because  of  the  fact  that  many  of  the  plants  are  isolated 
and  the  time  consumed  going  to  and  from  them,  isn't  it  possible  that 
by  a  better  co-operation  of  inspections,  a  saving  could  be  made  ? 

Mr.  Kirby :     There  might,  in  some  smaller  industries. 

Mr.  Thompson :  Could  the  man  who  is  taking  care  of  a  country  district, 
for  example,  for  any  one  of  these  departments  take  care  of  all  of 
these  activities? 

Mr.  Kirby:  It  would  be  possible,  but  it  would  be  some  work  for  him. 
And,  besides,  a  man  who  is  competent  and  capable  to  look  after  sani- 
tary conditions  of  a  creamery  might  not  make  a  good  factory 
inspector.  A  man  competent  for  factory  inspector  has  to  be  a  man 
who  has  a  knowledge  of  machinery. 


150 

Mr.  Thompson :     Couldn't  your  men  be  readily  trained  in  those  things 

Mr.  Kirby:     I  don't  think  they  could. 

Mr.  Thompson:     Could  the  Fire  Marshal  cover  the  inspection   of  fir 
protection  ? 

Mr.  Kirby:     Yes,  that  could  be  easily  done. 

Mr.  Thompson:     Is  that  more  logically  a   part  of  their  work  or  you 
work? 

Mr.  Kirby:     Their  work. 

Mr.  Thompson:     How  about  health  conditions? 

Mr. -Kirby:     The  health  laws  of  Michigan  are  not  very  strict. 

Mr,  Thompson:     Could  the  laws  be  so  changed  so  as  to  cover  these  1» 
one  inspection  ? 

Mr.  Kirby :     So  far  as  health  is  concerned. 

Mr.  Thompson:  I  understand  that  in  a  hotel,  for  instance,  an  inspect io 
by  your  department  is  made  as  to  safety  of  employes;  by  the  liealt 
department  an  inspection  as  to  sanitary  conditions;  an  inspection  b 
the  dairy  and  food  department  as  to  cleanliness,  etc.;  inspectio 
made  by  fire  marshal  as  to  safety  of  guests,  etc.;  can  you  conceive 
of  any  plan  to  co-ordinate  those? 

Mr.  Kirby:     Well,  I  don't  know. 

Mr.  Thompson:  Do  you  think  it  would  be  a  good  plan  to  put  them 
under  one  department  ? 

Mr.  Kirby:  I  don't  imagine  for  a  moment  that  the  Fire  Marshal  could 
take  care  of  health  conditions. 

Mr.  Thompson:  If  the  Commissioner  of  Labor,  Secretary  of  Board  of 
Health,  Dairy  and  Food  Commissioner,  Commissioner  of  Insurance, 
all  work  together,  do  you  think  they  could  devise  a  plan  to  save 
effort? 

Mr.  Kirby:  I  think  if  the  public  buildings— everything  but  factories- 
were  taken  from  under  our  control  as  to  fire  protection,  it  would  be 
quite  a  saving. 

Mr.  Thompson:     What  do  you  do  about  occupational  diseases? 

Mr.  Kirby:  There  should  be  a  medical  inspection  as  in  New  York, 
Massachusetts,  Illinois,  California,  etc. 

Mr.  Thompson:  How  do  the  Michigan  labor  laws  compare  with  the 
laws  of  other  states? 

Mr.  Kirby:  Most  of  the  laws  of  other  states  are  modeled  principally 
after  the  Michigan  laws ;  they  have  been  enlarged  in  most  cases. 

Mr.  Thompson  :     In  what  respects  is  Michigan  behind  the  other  states? 

Mr.  Kirby :     In  the  matter  of  occupational  disease. 

Mr.  Thompson:  Can  you  conceive  of  any  way  to  reduce  the  expense  of 
your  department  and  still  keep  up  its  activities  and  efficiency? 

Mr.  Kirby :  We  ought  to  have  more  money  to  establish  more  free  employ- 
ment bureaus. 

Mr.  Thompson:     How  about  the  inspection  of  state  institutions? 

Mr.  Kirby:     We  inspect  the  machinery  in  the  state  institutions. 

Mr.  Tompkins :     How  long  have  you  been  doing  that  ? 

Mr.  Kirby:     Ever  since  I  have  been  here. 

Mr.  Tompkins :  Do  you  examine  the  machinery  of  private  contractors 
in  prisons  ? 

Mr.  Kirby :     Yes,  but  I  don't  know  as  there  is  any  now. 

Mr.  Thompson :     Yes,  I  think  there  is  at  Ionia. 


151 

*Mr.  Thompson :     What  moneys  do  you  collect  ? 

Mr.  Kirby:     We  collect  fees  from"  boat  inspections,  and  from  private 

employment  agencies. 

Mr.  Thompson :     What  are  the  fees  you  collect  ? 
[Mr.  Kirby:     $25.00  outside  of  the  city  of  Detroit  and  $100.00  in  the 

city.    These  are  the  only  two  sources. 

!Mr.  Thompson :     How  many  private  employment  agencies? 
Mr.  Kirby:     Thirty-one. 
|Mr.  Thompson  :     What  is  the  basis  of  licenses;  what  examination  do  you 

make  ? 
Mr.  Kirby:     They   have   to   give   a   bond   of   $1,000.00,    sureties   to   be 

approved  by  the  Prosecutor  or  one  of  the  Circuit  Court  Judges  of  the 

county. 
Mr.  Thompson:     What  is  the  condition  of  that  bond;  that  is,  why  do 

they  give  the  bond  ? 
Mr.  Kirby:     They  give  the  bond  as  surety  for  non-violation  of  the  state 

law. 
Mr.  Thompson :     How  are  your  expenses  paid,  by  appropriation  or  from 

the  general  fund? 
Mr.  Kirby:     The  Commissioner's  and  Deputy  Commissioner's  salaries 

come  out  of  the  general  fund,  and  the  traveling  expenses  out  of  the 

appropriation.     Boat  inspectors'  and  mine  inspectors'  salaries  and 

expenses  are  paid  out  of  the  general  fund  of  the  state. 
Mr.  Thompson:     What  was  vonr  last  appropriation? 
Mr.  Kirby:     $65,000.00. 

Mr.  Thompson :     How  much  did  you  spend  in  addition  to  the  $65,000.00  ? 
Mr.  Kirby:     I'll  look  it  up.    We  spent,  in  addition  to  this  amount,  the 

salary  of  the  Commissioner  and  Deputy,  boat  inspectors'  and  mine 

inspectors'  salaries  and  expenses,  and  the  expense  of  printing  and 

binding  and  stationery. 
Mr.  Thompson :     Who  audits  your  claims  ? 
Mr.  Kirby:     The  Board  of  Auditors  audits  our  claims  for  printing  and 

binding  and  stationery;  also  our  mine  and  boat  inspectors'  expense 

account.    The  Auditor  General  audits  our  payroll  and  our  expense 

accounts. 


Receipts  from  private  employment  agencies  last  ; 
Total  expense  account,  $62,828.27. 


COMMISSIONER  OF  BANKING 


year,  $3,448.22. 


Mr.  Lord:     Mr.  Manning,  you  are  the  Deputy  Commissioner  of  Banking? 

Mr.  Manning:     Yes  sir. 

Mr.  Lord :  Will  you  state  to  the  Budget  Commission  what  the  activities 
of  the  banking  department  are,  in  a  general  way? 

Mr.  Manning:  We,  of  course,  administer  the  provisions  of  the  banking 
law,  and  the  trust  company  law,  and  at  the  present  time  the  steam- 
ship law.  The  bulk  of  our  work  comes  under  the  banking  law.  In  a 
brief  way,  we  have  to  do  with  the  organization  and  supervision  of 
banks.  Now,  in  the  organization  of  banks,  the  procedure  at  the 


152 

present  time  in  organization  of  the  bank  is  that  we  require  an  appli 
cation  to  be  filed,  signed  by  five  or  more  of  the  incorporators. 
We  also  require  them  to  furnish  us  with  a  separate  list,  if  possible 
of  the  persons  whom  they  think  will  own  the  majority  of  the  stock 
That  application  gives  the  financial  worth  of  the  incorporators  an< 
their  banking  connection,  if  any.    We  endeavor,  through  commercia 
agencies  and  other  sources,  to  verify  these  figures,  and,  if  ther 
happens  to  be  another  bank  in  that  locality,  we  take  testimony  an< 
ascertain  as  to  the  necessity  of  another  bank  in  that  locality. 
we  deem  everything  satisfactory,  we  approve  the  application  an< 
send  them  articles  of  incorporation.    We  send  three  copies  of  article 
of  incorporation  and  all  three  come  back  to  this  department,  wher 
they  are  examined  and  approved. 
We  are  required,  before  a  bank  is  authorized  to  do  business,  to  mak 
an  examination,  which  we  do,  and  have  in  every  instance  during 
the  past  eight  years.    That  preliminary  examination,  which  we  make, 
we  charge  for  at  the  rate  of  $10.00  a  day  and  expenses.    If  the  report 
of  the  examiner  is  satisfactory  and  they  have  complied  with  all  pro- 
visions of  the  banking  law,  they  are  given  a  charter.    They  then  can 
commence  business  and  from  that  time  on  the  bank  is  subject  to  two 
examinations  a  year. 

We  have  practically  the  same  system  with  reference  to  the  organiza- 
tion of  trust  companies ;  we  follow  practically  the  same  routine.  By 
the  way,  there  are  not  very  many  trust  companies  in  the  state  at 
the  present  time;  I  think  there  are  ten  altogether.  We  had,  at  the 
close  of  business  in  November,  five  hundred  state  banks,  one  indus- 
trial bank,  ten  trust  companies. 

Mr.  Lord:     What  is  this  industrial  bank? 

Mr.  Manning:  The  Morris  plan  bank.  It  is  under  a  separate  law  and 
they  are  subject  to  practically  the  same  supervision  as  the  state 
banks.  The  Morris  plan  is  for  the  purpose  of  giving  the  small  bor- 
rower an  opportunity  to  borrow  money  and  get  away  from  the  loan 
sharks. 

Mr.  Lord:  About  what  percentage  of  banks  that  make  application  for 
charters  do  you  grant? 

Mr.  Manning:     I  should  think  about  two-thirds,  perhaps  60  per  cent. 

Mr.  Lord :     So  that  you  turn  down  quite  a  good  many. 

Mr.  Thompson:     What  are  the  grounds  on  which  you  turn  down  a  bank? 

Mr.  Manning:  The  character  of  the  man,  and  possibly  if  we  thought 
there  were  already  enough  banks  in  the  community.  So  far  as  the 
law  is  concerned,  we  would  not  have  any  right  to  refuse  the  articles 
of  incorporation,  but  we  have  done  so,  and  in  only  one  case  have 
they  insisted  on  going  ahead.  In  that  case  he  was  not  a  good  loan 
man  and  was  a  trouble-maker,  as  we  knew  through  his  former  con- 
nection with  a  state  bank. 

Mr.  Lord:     How  many  examinations  of  banks  did  you  make  last  year? 

Mr.  Manning:     Nearly  one  thousand. 

Mr.  Lord:     Did  any  of  these  banks  fail  last  year  that  were  examined? 

Mr.  Manning:  No  sir;  we  have  never  had  a  failure  since  the  failure  of 
the  bank  at  Clarkston. 

Mr.  Lord:  Have  you  found  very  many  of  the  banks  with  capital 
impaired  ? 


153 

Mr.  Manning:     Not  recently. 

Mr.  Lord:  What  steps  do  you  take  when  you  find  a  condition  of  that 
kind? 

Mr.  Manning:  If  impairment  is  not  made  good  voluntarily,  we  take 
steps  to  levy  an  assessment  on  the  stockholders. 

Mr.  Lord:  The  percentage  of  failure  of  banks  in  Michigan  has  been 
very  small  for  several  years,  hasn't  it? 

Mr.  Manning :     Very  small. 

jlMr.  Lord:     Do  you  think  it  is  the  result  of  the  close  supervision  made 
by  the  Banking  Department? 

Mr.  Manning:  History  of  receiverships  will  show  you  that  they  have 
become  less,  whether  it  is  due  to  the  department  or  to  general  pros- 
perity of  the  country,  I  can't  say.  This  we  know,  we  make  a  good 
many  recommendations  that  the  public  know  nothing  about.  We 
correct  a  lot  of  very  dangerous  conditions  about  which  nothing  is 
ever  said. 

Mr.  Lord :     What  is  the  nature  of  these  conditions  ? 

Mr.  Manning:  One  of  the  conditions  that  we  have  found  in  the  past 
is  the  over-loaning  of  bank  funds  by  officers  to  those  concerns  in 
which  they  are  interested.  The  over-extension  of  credit  to  those  who 
have  management  of  the  bank. 

Mr.  Lord:  In  the  matter  of  savings  banks,  do  you  ever  take  any  steps 
to  appraise  the  physical  properties  covered  by  mortgages? 

Mr.  Manning :  We  rely  on  appraisals  made  by  directors  or  by  appraisal 
committees.  Up  to  seven  years  ago,  very  little  attention  was  paid 
to  that  factor  of  it,  but  we  have  kept  constantly  at  it  and  there  are 
very  few  loans  in  Michigan  today  not  accompanied  by  an  appraisal. 
Ordinarily,  it  is  accompanied  by  a  signed  appraisal,  or  it  is  indicated 
on  the  mortgage  register.  Of  course,  since  the  segregation  law  was 
enforced,  we  have  been  more  particular  to  definitely  ascertain  what 
mortgages  were  good. 

I  think  it  was  under  Mr.  Doyle's  administration  that,  in  the  smaller 
banks,  cities  smaller  than  Lansing,  we  traced  every  mortgage.  It 
cost  us  a  lot  of  money,  but  it  was  for  the  purpose  of  tracing  out 
cases  such  as  I  cited  a  few  minutes  ago. 

Mr.  Lord:  Do  you  make  special  effort  to  ascertain  the  actual  value  of 
quick  assets  in  your  examinations?  Do  you  ever  take  any  pains  to 
see  whether  or  not  collateral  security  to  a  note  is  ample? 

Mr.  Manning :  Our  men  are  instructed,  where  banks  have  any  collateral, 
to  ascertain  whether  or  not  there  is  a  statement  on  file  with  that 
borrowing  company,  but  if  stock  is  there  only,  they  are  supposed  to 
get  some  idea  as  to  the  value  of  that  stock.  If  the  loan  is  of  any 
considerable  size,  we  verify  it  in  some  other  way.  We  try  and  find 
out  someone  who  knows  the  general  reputation  of  the  company. 
Part  of  our  credit  system  consists  of  going  once  a  year  to  the  Secre- 
tary of  State's  office  and  copying  all  the  statements  of  every  corpora- 
tion in  Michigan.  That  is  bound  in  book  form.  It  also  contains 
the  names  of  the  principal  stockholders  and  directors.  If  a  man 
goes  to  Bax  Axe,  Grand  Haven,  etc.,  he  takes  with  him  these  books. 
We  keep  these  reports  here  and,  if  there  is  any  question  raised,  we 
compare  with  these  reports.  They  are  not  always  authentical  but 


154 

they  are  better  than  none  at  all  and  a  great  deal  better  now  than 
a  few  years  ago ;  we  have  more  detail  and  they  are  more  reliable. 

Mr.  Lord:  Isn't  it  true,  Mr.  Manning,  that  the  close  supervision  by 
your  department  has  tended  to  make  the  banks  improve  their 
methods  of  handling  loans? 

Mr.  Maiming :  I  think  it  is  safe  to  say  that  you  will  find  ten  statements 
now  where  you  would  not  have  found  one  five  years  ago.  Both  Mr. 
Merrick  and  Mr.  Doyle  have  insisted  on  a  lot  of  changes  being  made 
in  bookkeeping  systems  in  banks.  For  instance,  they  have  insisted 
that  they  keep  a  permanent  list  by  name  and  the  amount  of  cash 
items.  It  is  a  good  thing  to  .have  on  record  so  that  the  examiner 
can  tell  the  condition  of  the  cash  from  time  to  time.  Another 
matter,  is  the  item  of  a  liability  ledger.  It  has  been  a  hard  matter 
in  country  banks  to  bring  them  around  to  see  it  in  the  right  light, 
but  the  majority  of  them,  after  the}7  have  had  it,  would  not  be 
without  it. 

Mr.  Lord:     What  are  the  fees  now  that  you  charge  the  banks? 

Mr.  Manning:     One  one-hundredth  of  one  per  cent. 

Mr.  Lord:     What  were  the  receipts  of  the  department  last  year? 

Mr.  Manning:  The  receipts  from  examinations  of  all  kinds,  annual, 
preliminary  and  special,  were  f 57,483.92;  collections  from  other 
sources  $517.23.  Then  we  take  credit  for  the  amount  of  money  that 
we  turn  over  to  the  Secretary  of  State  on  account  of  franchise  fees ; 
that  amounted  to  $2,544.50,  making  a  total  of  $60,545. (15. 

Mr.  Lord :     What  was  the  cost  of  the  department? 

Mr.  Manning:     Our  total  expenses  up  to  December  1st  were  $72,956.(>l. 

Mr.  Lord :  All  this  money  you  collect  from  banks  goes  into  the  general 
fund? 

Mr.  Manning :  Yes  sir.  Of  course,  there  is  one  thing  to  be  considered  in 
this  department,  that  is  the  constantly  growing  number  of  banks. 
The  resources  are  increased  and  we  are  increasing  our  work;  our 
examinations  are  being  improved  from  year  to  year. 

Mr.  Thompson :  Will  the  Federal  Reserve  system  add  to  those  exami- 
nations? 

Mr.  Manning:  It  will  add  in  this  way — that  eventually  we  will  have 
to  pay  more  attention  to  statements.  Largely,  the  increase  in  the 
work  will  be  copying  in  the  office,  making  duplicate  copies  of  thai 
report,  sending  one  to  Chicago  and  one  to  Washington. 

Mr.  Thompson:     Will  the  banks  all  become  members? 

Mr.  Maiming:  I  think  they  will:  it  may  take  five  years  but  I  thinl 
they  will  eventually. 

Mr.  Lord:  Tell  us  about  your  examining  force.  What  are  the  neces 
sary  qualifications  for  examiner  in  this  department? 

Mr.  Manning:  We  generally  pick  out  men  who  have  had  banking  experi 
ence. 

Mr.  Lord:     You  don't  pay  any  attention  to  politics? 

Mr.  Manning:  We  don't  know  anything  about  that.  We  haven't  foi 
eight  or  twelve  years.  Doyle  used  to  say  "religion  or  politics  doesn' 
count  anything  with  me."  In  fact,  the  more  they  try  to  get  a  positioi 
by  political  pull,  the  less  chance  they  have. 

Mr.  Lord:  Do  you  find  it  very  difficult  to  get  desirable  men  at  th« 
present  time? 


155 

Mr.  Manning:     We  do  at  the  present  time.    Salaries  have  been  increased 
in  banks    or  men  with  experience  can  get  higher  salaries  in  other 
lines. 
•.  Lord:     Have  you  lost  any  competent  men  because  of  low  salaries 

paid  by  the  state  ? 
•.  Manning:     A  great  many. 
•.  Lord:     Do  you  think  the  department  and  the  state  has  suffered  On 

that  account  ? 

•.  Manning:  There  is  no  question  about  it.  During  the  last  eight 
years  we  have  lost  at  least  twenty  men,  whom  the  state  has  educated. 
At  one  time  we  could  not  pay  them  over  $1,700.00  and  another  time 
over  $2,200.00  a  year. 

'.  Lord :     What  is  the  maximum  salary  now? 
*.  Manning:     $2,500.00  a  year. 

*.  Lord :  Hew  long  does  an  examiner  have  to  be  in  your  service  before 
he  reaches  the  maximum? 

Mr.  Manning:     He  starts  in  at  $1,700  and  is  raised  $200.00  a  year. 

Vlr.  Lord :     Is  it  not  a  fact  that  men  going  into  your  department  expect 

to  leave  as  soon  as  they  get  educated  ? 

•.  Manning:  Yes,  that  is  usually  so.  We  don't  hire  our  men  in  the 
first  instance  as  examiners.  We  hire  some  at  $900.00,  $1,200.00  or 
$1,500.00  a  year.  After  a  man  works  three  months,  or  one  month, 
he  is  given  an  opportunity  to  pass  an  examination  and,  if  he  passes, 
he  is  made  examiner.  It  is  an  examination  that  would  apply  solely 
and  only  to  a  department  of  this  kind ;  largely  on  law  and  general 
banking  methods;  more  particularly  along  our  particular  system 
here.  We  know  that  a  man,  after  passing  that  examination,  will  not 
get  himself  or  us  in  wrong  in  the  ordinary  bank.  I  think  Mr.  Doyle 
instituted  this  system. 

\  Lord:  Do  you  know  of  any  way  by  which  the  efficiency  of  your 
department  could  be  increased,  or -is  there  any  equipment  you  need 
that  would  increase  the  efficiency  of  your  department? 

Mr.  Man-ning:  Yes,  we  ought  to  have  more  clerical  help.  We'  are 
limited  by  law  to  five  clerks. 

Mr.  Lord:     Have  you  always  been  limited? 

Mr.  Manning:.  For  fifteen  "or  twenty  years. 

Mr.  Lord :  Notwithstanding  the  increase  in  your  business,  you  have  not 
been  granted  an  increase  in  the  number  of  your  clerks. 

Mr.  Manning:  That  doesn't  include  our  chief  clerk  or  assistant  exam- 
iner. This  man  divides  his  duties  between  running  the  liability 
ledger  and  assisting  in  some  of  the  examination  work.  Sooner  or 
later  we  will  have  to  have  more  clerks. 

Mr.  Lord:  Have  you  ever  called  the  attention  of  the  legislature  to 
that? 

Mr.  Manning:     Mr.  Doyle  did  at  one  time,  but  couldn't  put  it  across. 

Mr.  Thompson:     How  many  clerks  should  you  have? 

Mr.  Manning:  If  we  brought  up  our  credit  department  to  where  it 
should  be,  we  ought  to  have  at  least  five  more  clerks. 

Mr.  Thompson  :     Why  should  there  be  a  limitation  at  all  ? 

Mr.  Manning:  There  should  not  be,  and  I  don't  know  why  it  was  put 
into  the  law. 

Mr.  Lord:     It  is  not  limited  in  other  departments. 


156 

Mr.  Manning:     We  have  no  limit  on  examiners  or  assistant  examiners, 
but   we    couldn't    appoint    young   ladies    as    assistant    examiners.^ 
Another  thing  is  the  present  salary  law.     We  don't  get  competent  j 
help  for  the  salaries  we  ha*ve  to  pay.    Our  salaries  must  not  exceed] 
|1,100.00.    According  to  the  salaries  they  are  paying  outside,  this  is 
not  enough. 

Mr.  Lord:  What  do  you  think  of  an  amendment  to  the  graded  salary 
law,  having  a  maximum,  but  no  minimum  ? 

Mr.  Manning:  I  would  be  in  favor  of  increasing  the  average  to  $1,200.00 
and  having  no  minimum. 

Mr.  Lord:  Your  department  ranks  high  with  similar  departments  in 
other  states,  does  it  not? 

Mr.  Manning:  Our  system  of  examination  has  been  accepted  by  the 
Federal  Reserve  Board  at  Minneapolis,  Chicago  and  Washington; 
the  national  bank  examiners  have  told  us  that  we  were  one  of  the 
three  states  to  have  our  system  accepted  without  any  changes.  Of 
course,  conditions  are  changing,  and  we  are  forced  to  change.  I 
could  take  you,  if  I  had  the  time,  through  an  examination  that  we 
considered  a  good  examination  ten  years  ago  and  compare  it  with: 
an  examination  of  today. 

Mr.  Thompson:  What  effect  would  it  have  if  the  state  building  and 
loan  activities  were  brought  under  this  department? 

Mr.  Manning:  We  are  not  asking  for  it.  Why,  1  don't  know  as  T  would 
want  to  answer  that  question. 

Mr.  Thompson:     It  would  add  to  your  expense? 

Mr.  Manning:  Certainly  it  would  add  to  our  expense,  and  we  would 
have  to  educate  our  men  to  do  that  kind  of  work.  It  is  a  different 
kind  of  work  entirely. 

Mr.  Thompson  :     This  is  the  logical  place  for  it,  is  it  not? 

Mr.  Manning:     A  great  many  think  so;  I  think  so. 

Mr.  Lord:  What  do  you  do  in  cases  where  you  find  a  loan  has  been 
made  to  somebody  by  the  cashier  or  president  of  the  bank,  and  it 
has  not  been  authorized  by  the  Board  of  Directors? 

Mr.  Manning:  We  require  them  to  authorize  it  at  their  next  meet  ing. 
We  take  the  position  that  their  records  should  show  the  specific 
name  and  the  amount  of  every  loan. 


FOOD  AND  DRUG  COMMISSIONER 

Mr.  Lord:     Mr.  Woodworth,  you  are  the  Dairy  and  Food  Commissioner? 

Mr.  Woodworth:     Yes,  sir. 

Mr.  Lord :  Will  you  state  to  the  Budget  Commission,  in  as  brief  a  man- 
ner as  possible,  the  various  activities  of  this  department? 

Mr.  Woodworth:  This  department  was  created  in  1893  to  regulate 
the  food  -sold  and  manufactured  in  Michigan,  and  to  foster  and 
encourage  the  dairy  industry ;  later  we  were  given  certain  duties  in 
connection  with  the  drugs,  very  similar  to  those  connected  with  the 
foods.  Still  later,  there  was  added  to  our  work  the  "weights  and 
measures,"  previously  held  by  the  State  Treasurer,  and  each  suc- 
ceeding legislature  has  added  detailed  duties  in  connection  with 
those  foijr  lines. 


157 

Our  food  work  is  taken  care  of  by  about  six  inspectors,  who  try,  as 
near  as  they  can,  to  cover  each  food  establishment  in  his  territory, 
and  when  they  see  any  article  of  food  that  looks  to  them  as  though 
it  should  be  investigated,  they  at  once  buy  a  sample  and  pay  for  it, 
send  it  in  to  the  laboratory,  and  that  becomes  what  we  call  an 
"official  sample."  This  sample  goes  to  the  laboratory,  where  it  is 
examined,  then  they  make  a  report  to  the  front  office  and  the  office 
reports  to  inspector  and,  in  case  it  seems  wise  to  make  prosecution, 
we  lay  the  case  before  the  Prosecuting  Attorney  in  the  said  territory. 
The  same  procedure  is  followed  as  to  drug  samples.  We  have  two 
inspectors  who  try,  and  have  succeeded,  in  making  every  drug  store 
in  Michigan  once  a  year.  They  take  nip  samples  of  standard  drugs, 
have  them  analyzed,  and  make  prosecutions. 

In  our  dairy  work,  we  have  a  head  of  the  dairy  department  and 
two  inspectors  all  the  time,  and  occasionally,  in  some  extraordinary 
circumstances,  we  put  on  a  special  inspector  at  a  smaller  wage. 
These  inspectors  try  to  visit  every  creamery  and  milk  establishment 
in  the  state  once  a  year,  and  in  addition  to  that  we  try  to  assist 
dairy  men,  and  more  especially  creameries,  to  solve  any  problems 
that  are  vexing  to  their  business.  -For  instance,  if  some  creamery 
manager  advises  us  that  his  butter  is  off-grade,  and  that  he  is  getting 
a  low  price  for  it,  we  try  to  have  our  inspector  go  to  his  creamery 
and  find  out  where  the  trouble  is,  whether  it  is  poor  raw  material, 
defective  machinery,  or  whatever  it  is.  They  usually  succeed  in  help- 
ing to  locate  the  cause.  We  have  a  constant  call  for  men  to  go  to 
dairy  meetings  and  speak,  and  these  same  inspectors  do  that  work. 
On  the  "weights  and  measures,"  we  have  one  of  our  regular  inspect- 
ors assigned  to  that  work,  and  he  is  the  only  one  that  attends  to 
that,  has  sort  of  a  general  supervision  over  that,  and  more  than  that, 
we  borrow  the  Federal  track  scale  car  and  he  usually  goes  with 
that  car.  The  Federal  Government  sends  a  man  also  who  examines 
track  scales. 

Mr.  Lord :     Where  you  are  advised  of  a  defective  scale,  what  steps  do  vou 
take? 

Mr.  Woodworth  :  All  of  our  regular  Food  Inspectors  have  a  small  scale 
testing  outfit,  and  when  they  find  a  scale  incorrect  they  attach  a 
tag  to  the  scale  saying  it  is  condemned.  A  great  many  times  they 
can  fix  it  themselves,  as  nine  times  out  of  ten,  the  scale  has  just  a 
trivial  defect.  It  is  a  peculiar  condition,  but  we  find  about  8  per 
cent  of  the  scales  that  we  test  are  robbing  the  merchant,  and  if  you 
stop  to  think  of  the  conditions  under  which  they  work,  you  will  see 
-  how  this  happens.  In  order  to  make  weight  it  "must  move.  A  lack 
of  oil,  dust,  or  anything  like  that,  makes  it  move  a  little  slower,  of 
course. 

Mr.  O'Brien:     Do  you  prosecute  the  cases  where  you  find  scales  incor- 
rect? 

Mr.  Woodworth :     We  never  prosecute  unless  we  think  it  will  do  some 
good. 

Mr.  O'Brien :     Have  you  ever  had  any  prosecutions  ? 

Mr.  Woodworth :     I  think  there  are  twelve  or  fifteen  cases  on  the  docket 
in  Wayne  County  court  today. 
There  are  two  or  three  scale  cases  on  right  now. 


158 

Mr.  O'Brien :     What  period  of  time  does  that  cover  ? 

Mr.  Woodworth:  I  think  we  have  had,  perhaps,  six  or  eight  cases  a 
month  that  really  have  to  go  to  the  courts.  Nine  times  ont  of  ten, 
the  procedure  of  law  rather  prevents  them  going  to  the  court.  If 
the  scale  is  not  right,  they  send  word  to  the  man  they  bought  it 
from,  or  we  fix  it  ourselves. 

Mr.  O'Brien:  Is  there  really  no  penalty  for  the  man  himself?  Is  it  up 
to  the  maker  ? 

Mr.  Woodworth:  Well,  yes,  there  is  a  penalty  if  they  don't  fix  it.  We 
put  a  tag  on  it. 

Mr.  O'Brien:     What  is  to  prevent  him  from  removing  the  tag? 

Mr.  Woodworth:  The  law  makes  it  an  olt'euse.  The  "weights  and 
measures"  law  has  been  rather  shaped  to  effect  a  cure  without  courts, 
on  account  of  expense,  I  suppose. 

Mr.  Lord:  You  had  nearly  three  hundred  cases  commenced  the  year 
this  report  was  gotten  out? 

Mr.  Woodworth:  The  cases  commenced  are  a  very  poor  indication  of 
the  amount  of  work  done,  because  our  best  inspectors  are  the  fellows 
who  get  along  with  very  few  cases.  They  say  to  the  merchant,  "This 
is  wrong,"  and  the  merchant  says,  ".Just  tell  me  what  1  can  do  to 
remedy  it  and  I  will  do  it."  The  inspector  will  perhaps  show  him 
the  law  in  connection  with  it,  and  the  merchant  says.  "That  scale 
goes  to  the  dump." 

Mr.  O'Brien:     You  intend  to  make  annual  inspections? 

Mr.  Woodworth:  We  try  to,  but  our  funds  are  not  sufficient  to  allow  us 
to  do  so.  Our  inspection  of  counter  scales  is  better  than  of  heavy 
scales,  because  every  inspector  now- carries  an  equipment  for  testing 
the  counter  scales. 

Mr.  O'Brien:     The  coal  weighing  scales  are  not  inspected? 

Mr.  Woodworth:  Only  on  request,  or  in  case  the  county  has  a  proper 
equipment.  A  number  of  the  counties  have  their  own  equipment 
for  testing  the  heavy  scales. 

Mr.  O'Brien:     How  expensive  is  that  equipment? 

Mr.  Woodworth:     $60.00. 

Mr.  O'Brien:     That  is  usually  kept  in  the  county? 

Mr.  Woodworth:  In  most  counties  they  have  a  weights  and  measures 
man  and  he  tests  these  heavy  scales  with  the  equipment  belonging 
to  the  county,  on  request.  When  the  law  was  passed,  it  was  sup- 
posed that  every  county  should  do  that,  but  some  of  them  did  not  do 
it.  In  many  counties  it  is  the  County  Clerk  and  in  main7  counties  a 
separate  official. 

Mr.  Lord:  Yon  don't  make  much  of  an  attempt  to  inspect  wagon  scales, 
do  you  ? 

Mr.  Woodworth:  Yes;  we  do  make  an  attempt,  but  we  simply  haven't 
the  money,  and  it  is  a  very  feeble  attempt. 

Mr.  Lord:  The  inspections  made  don't  look  very  good.  Seventy-eight 
of  the  wagon  scales  were  found  correct  and  one  hundred  and  fourteen 
incorrect. 

Mr.  Woodworth:  They  are  very  often  incorrect.  I  think  it  is  only  fair 
to  say  that  my  estimate  is  that  80  per  cent  of  the  products  of  Michi- 
gan go  over  heavy  scales. 


159 

Mr.  O'Brien :  Would  you  just  outline  your  procedure  in  inspecting  these 
heavy  scales? 

Mr.  Woodworth :  We  attach  a  tag  to  them  and  it  is  up  to  the  man  who 
owns  them  to  get  them  fixed  before  the  tag  can  be  taken  off. 

Mr.  O'Brien  :     Suppose  he  doesn't  make  any  effort  to  get  them  fixed  ? 

Mr.  Woodworth :  That  tag  is  a  warning  to  buyers  or  sellers  that  the 
scales  are  wrong. 

Mr.  Lord:  How  many  cities  in  the  state  have  inspectors  of  their  own 
who  inspect  or  test  all  scales,  including  wagon  scales? 

Mr.  Woodworth :     About  six  or  eight. 

Mr.  Lord:     Are  those  men  appointed  by  common  councils? 

Mr.  Woodworth :  Usually.  In  Detroit  the  inspector  is  a  member  of  the 
police  force;  in  Grand  Rapids,  the  same  condition  exists;  but  in 
practically  every  other  city,  he  is  a  special  official. 

Mr.  Lord :  What  recommendations  have  you  to  make  in  regard  to  this 
inspection,  to  make  it  more  effective? 

Mr.  Woodworth :  I  would  advise  that  the  law  be  changed  so  that  every 
county  be  required  to  have  a  set  of  heavy  weights;  either  that,  or 
supply  this  department  with  a  motor  truck  sufficiently  heavy  to 
carry  these  weights.  Either  one  scheme  or  the  other.  It  is  a  question 
under  the  law  whether  we  could  compel  those  counties  who  have 
not  these  outfits  to  get  them.  In  addition  to  this,  we  test  the  scales 
of  each  state  institution  once  a  year,  and  more  than  once  if  they  so 
request. 

Mr.  Thompson :     One  motor  truck  would  not  be  enough,  would  it  ? 

Mr.  Woodworth  :     Yes,  it  would  cover  quite  a  territory. 

Mr.  Thompson:     How  is  this  handled  in  other  states? 

Mr.  Woodworth:  I  understand  that  most  of  the  states  have  motor 
trucks. 

Mr.  Lord :  It  seems  to  me  that  having  correct  weights  and  measures  is 
a  very  important  thing. 

Mr.  Woodworfh :  I  look  on  it  as  one  of  the  most  important  parts  of 
our  work.  I  think  accurate  and  reliable  weights  are  as  necessary  to 
a  community  as  an  accurate  system  of  coins. 

Mr.  Lord :     What  is  your  authority  over  measures  ? 

Mr.  Woodworth:  Same  as  it  is  over  weights.  This  department  has 
quite  a  complete  outfit  to  handle  weights  and  measures ;  weights  to 
make  test  with ;  outfit  to  test  gasoline  tanks ;  outfit  to  test  the  num- 
ber of  feet  of  thread  on  a  spool,  etc. 

M  r.  Lord :  How  much  additional  appropriation  would  you  require  to 
make  the  weights  and  measures  division  of  your  department  more 
effective? 

Mr.  Woodworth :  Well,  I  would  think  that  $2,500.00  would  put  us  in 
position  to  get  to  each  platform  scale,  once  a  year.  That  is,  in 
addition  to  what  we  are  spending  now. 

Mr.  Lord  :  If  you  need  f  1 0,000.00  for  the  work,  you  should  have  it.  It  is 
a  very  important  thing. 

Mr.  Woodworth :  Perhaps  I  am  low,  but  our  present  outfit  is  costing 
too  much,  considering  the  results  we  are  getting.  We  are  really  not 
completing  the  work,  are  not  getting  as  far  as  we  should. 

Mr.  Lord :  I  am  very  glad  you  brought  that  out ;  it  is  a  very  important 
thing. 


160 

Mr.  Woodworth:  At  the  last  session  of  the  legislature  I  had  a  bill 
introduced  placing  a  charge  on  every  inspection  of  heavy  weight 
scales,  and  we  failed  in  getting  it  through.  I  had  hoped  that  that 
bill  would  cover  this  feature.  Would  say,  however,  that  one  reason 
we  failed  to  get  the  bill  through  was  that  we  had  a  charge  for  testing 
railroad  scales  and,  of  course,  the  railroads  were  against  it. 

Mr.  Lord:     What  was  the  basis  of  their  objections? 

Mr.  Woodworth:  They  said  they  had  an  inspection  car  themselves  and 
also  that  the  companies  that  put  the  scales  in  inspected  them;  my 
contention  was  that  it  would  remove  trouble  and  give  general  satis- 
faction. 

Mr.  Lord :     If  the  state  inspected  them,  it  would  not  be  necessary  for 
'  the  companies  to  incur  that  cost. 

Mr.  Woodworth :  Your  incident  in  Grand  Haven,  Mr.  O'Brien,  illus- 
trates our  weakness.  We  try  and  test  every  heavy  scale  where  there 
is  a  request  for  the  inspection,  and  then  in  time  not  occupied  in  that 
way,  we  come  just  as  near  as  we  can  to  testing  all  the  others,  but  the 
result  is  that  our  work  is  not  completed  and  a  town  such  PS  Grand 
Haven  might  be  missed  several  years  in  succession.  We  should  have 
a  system  whereby  we  would  be  sure  to  visit  every  town  (•very  year. 
Of  course,  in  drawing  the  law,  the  legislature  presumed  that  every 
county  would  get  a  set  of  their  own,  and  we  have  hesitated  to  tell 
people  generally  that  we  were  ready  to  make  inspections,  simply 
because  the  work  was  piling  up  and  we  couldn't  deliver  the  goods, 
that's  all. 

Mr.  O'Brien:  Just  this  one  question  before  we  leave  weights  and  meas- 
ures. Where  would  you  assume  that  the  ordinary  citizen  of  Grand 
Haven  would  be  advised  of  the  fact  that  he  could  make  a  complaint 
to  this  department  of  an  assumed  shortage  in  his  coal? 

Mr.  Woodworth:  Nothing  except  the  law  and  our  bulletins.  I  will  say 
that  I  wrote  to  the  Chairman  of  your  Board  of  Supervisors  (to  ail 
chairmen  of  Supervisors)  asking  them  to  put  in  a  set  of  heavy 
weights. 

Mr.  O'Brien  :     Did  you  have  any  reply  ? 

Mr.  Woodworth :  I  don't  think  we  did.  It  might  be  that  your  county 
has  a  set  of  scales  and  are  not  using  them. 

Mr.  O'Brien:  If  they  had  a  set  of  scales,  you  would  know  it,  wouldn't 
you? 

Mr.  Woodworth:  Yes.  (Looked  up  the  matter.)  The  city  of  Holland 
has  secured  a  set,  but  not  the  city  of  Grand  Haven.  If  a  county  or 
city  would  get  this  $60.00  outfit,  any  county  official  could  settle 
almost  all  difficulties. 

Mr.  Lord:  Mr.  Woodworth,  are  any  of  the  other  activities  of  your 
department  made  ineffective  or  neglected  because  of  lack  of  sufficient 
money  ? 

Mr.  Woodworth :  We  would  put  in  a  better  inspection  of  food  work  if 
we  had  more  money. 

Mr.  Lord :  How  much  would  you  need  to  make  it  as  effective  as  you 
would  like? 

Mr.  Woodworth:  I  really  believe  we  ought  to  have  one  food  inspector 
for  each  congressional  district.  As  it  is  now,  our  districts  are 
larger  than  that  by  considerable ;  we  never  have  more  than  eight  in 


161 

the  state,  and  the  city  of  Detroit  ought  to  have  about  four.  The 
City  Board  of  Health  in  Detroit  has  one  man  assigned  to  that  work. 
Lord:  Would  four  be  enough  to  cover  the  city  of  Detroit,  taking 
in  all  the  lunch  counters,  etc.  ? 

Wood  worth:  We  have  four  there  now  and  we  wish  we  could  do 
the  work  better. 

Lord  :     How  much  would  that  additional  cost  be  ? 
Woodworth :     I  should  say  that  it  would  cost  about  f  20,000.00  more. 
That  would  bring  our  total  cost  about  equal  with  the  Labor  Depart- 
ment's.   We  run  on  an  appropriation  of  $35,000.00  a  year  and  some 
fees? 

Lord:     How  many  additional  inspectors  would  $20,000.00  provide? 
Woodworth :     It  would  mean  about  eight  more. 
Lord:     $20,000.00   would   cover   all   that   cost,   salaries,   traveling 
expenses,  equipment,  etc.  ? 

Woodworth :     Yes,  and  every  one  of  those  eight  would  have  a  set  of 
counter  weights  and  test  weights  and  measures.    We  find  that  the 
same  inspector  can  be  taught  to  inspect  various  things. 
Lord:     How  much  in  fees  did  you  collect  last  year? 
Woodworth :     $13,288.00.     Total  amount  available  from  appropria- 
tion and  fees,  $48,288.00. 

Lord:  What  charge  is  made  for  the  various  licenses  you  collect 
fees  for? 

Woodworth :     Well,  creameries,  etc.,  $5.00  a  piece ;  ice  cream  manu- 
facturers, $5.00  a  piece;  milk  dealers,  $1.00;  commission  merchants, 
$25.00;  manufacturers  of  carbonated  beverages,  soda  water,  grape 
juice,  other  soft  drinks,  and  syrup  licenses,  $10.00. 
Lord :     Was  the  total  amount  of  $48,288.00  used  up  ? 
Woodworth:     Not  quite  all.     This  is  the  reason.     I  took  office  the 
first  of  January,  and  I  was,  I  rather  think,  too  cautious.    We  couldn't 
afford  to  go  over  our  appropriation  and   I   think  we  had  about 
$1,000.00  unexpended  balance.    Simply  because  I  had  to  have  a  little 
leeway  for  unusual  expenses. 

Lord:     Do  you  draw  anything  from  the  general  fund? 
Woodworth :     No.    These  fees  represent  some  special  service.     The 
ice  cream  manufacturers'  license  was  put  on  at  the  time  when  the 
ice  cream  law  was  passed  and  the  idea  of  the  legislature  was  that 
the  fees  would  just  about  make  up  for  the  extra  cost  to  the  state,  to 
give  them  the  extra  service  contemplated  in  the  law.     The  milk 
dealers'  license  was  simply  to  bring  the  milk  dealer  on  record. 
Thompson:     On  what  grounds  should  the  state  make  charges  for 
any  special  services  ? 

Woodworth:  My  idea  is  that  the  only  ground  is  that  we  give 
them  some  service.  I  think  that  where  an  activity  is  necessary  for 
the  public  welfare,  the  proper  policy  would  be  to  have  the  public 
bear  its  proper  pro  rata  of  the  expense. 

Thompson :  Ought  the  activity  to  bear  a  pro  rata  of  public 
expenses  ? 

Woodworth:  Yes,  insofar  as  the  activity  is  benefited.  Every 
activity  which  is  inspected  and  bears  approval  of  the  state,  should 
be  simply  self-supporting  to  the  state. 


162 

Mr.  Thompson:    What,  in  your  judgment,  should  be  done  with  those 

fees? 

Mr.  Woodworth:  I  think  that  they  should  all  be  turned  in  to  the 
general  fund  of  the  state  and  we  should  depend  on  appropriations 
for  expenses,  etc. 

Mr.  Thompson:  You,  for  instance,  carry  on  a  series  of  dairy  inspec- 
tions for  the  purpose  of  giving  the  people  of  Michigan  good  service 
as  to  dairy  products;  one  reason  why  we  don't  get  better  products 
is  ignorance  on  the  part  of  people  in  charge  of  that  work.  It  is 
perhaps  true  that  a  greater  publicity  and  a  campaign  of  education 
along  that  line  would  increase  the  efficiency  of  producers  of  dairy 
products;  ought  those  license  fees,  for  instance,  to  cover  that  phase 
of  it? 

Mr.  Woodworth:     In   that   particular   instance,   I   doubt   whether   the 

state  would  have  the  authority.     As  a  general  rule,  I  think  that, 

where  the  state  gives  some  special  service,  the  special  service  should 

pay. 

Mr.  Lord :     Isn't  it  a  fact  that,  if  you  settle  the  expense  on  the  activity, 

ultimately  the  consumer  would  pay  it? 
Mr.  Woodworth:     In  some  cases. 
Mr.  Lord:     In  most  cases,  wouldn't  it  be  true?    Wouldn't  the  expense 

of  dairy  inspections  be  put  on  to  the  cost  of  dairy  products  ? 
Mr.  Woodworth:  In  nine  cases  out  of  ten  the  inspections  lessen  the 
cost  rather  than  increase  it.  One  reason  is  that  we  usually  increase 
the  efficiency  of  that  plant.  For  instance,  we  inspect  a  creamery 
and  perhaps  before  the  inspection  that  creamery  is  making  butter 
that  grades  as  second ;  our  inspector  goes  there  and  sizes  up  the 
plant,  finds  the  trouble  and  has,  or  the  owner  has,  it  remedied.  As 
a  result,  the  next  shipment  of  butter  is  of  such  an  improved  quality 
that  the  whole  thing  is  adjusted  and  a  better  price  allowed  for  the 
product. 

Mr.  Thompson  :     Following  out  Mr.  Lord's  thoughts ;  suppose  the  inspec- 
tion of  some  certain  line  of  activity  is  added  to  the  cost  of  that 
activity,  what  is  the  argument  for  inspection  then?     Take  milk 
dealers,  for  instance  ? 
Mr.  Woodworth :     The  higher  quality  of  the  food  supply  and  the  public 

health. 
Mr.  Lord :     What  other  activity  in  your  department  could  be  made  more 

efficient  by  an  increase  in  appropriation? 

Mr.  Woodworth:  Well,  like  every  department  and  everyone  that  is 
engaged  in  some  special  work,  we  all  see  many  things  we  would  like 
to  improve.  I  have  already  indicated  what  we  could  do  in  the 
weights  and  measures  proposition.  As  I  said,  I  think  we  ought  to 
have  smaller  areas  for  food  inspectors.  I  think  the  drug  inspection 
is  now  carried  on  in  a  satisfactory  manner. 

Mr.  Woodworth:  Several  laws,  and  those  laws  have  been  the  occasion 
for  most  of  the  fees,  have  been  passed  giving  us  special  work  in  con- 
nection with  different  branches.  For  instance,  carbonated  beverages 
now  require  state  inspection  and  a  certain  fee  has  been  put  on  that. 
The  carbonated  beverage  licenses  amounted  to  $1,280.00  and  one 
man  does  it  in  a  sort  of  a  way. 
Mr.  Lord :  In  a  sort  of  a  way ;  what  do  you  mean  by  that? 


163 

Mr.  Woodworth:  Two  men  would  do  it  much  more  effectively.-  We 
would  like  about  twice  as  much  money.  They  operate  in  about  five 
months'  time  and  that  means  the  inspections  have  to  be  within  that 
time.  In  the  city  of  Detroit  we  have  found  bottling  establishments 
in  back  of  stables,  and  have  found  inferior  products  being  put  in 
bottles  of  good  dealers.  We  go  to  that  sort  of  a  fellow  and  usually 
a  warning  will  stop  him.  In  fact,  we  go  to  all  the  plants  and  have 
them  try  to  bring  their  production  up  to  the  state  standard. 

Mr.  Thompson:  What  is  your  thought  as  to  carrying  on  your  dairy 
activities  ? 

Mr.  Woodworth :  It  is  a  question  in  my  mind  whether  the  extension 
work  in  dairy  industries  should  be  in  this  department,  because,  in 
Michigan,  we  have  the  Agricultural  College  doing  similar  work.  The 
Federal  Government  bears  one-half  of  the  expense  of  this  extension 
work  and,  while  I  am  not  prepared  to  say  absolutely,  it  is  a  question 
if  it  would  not  be  better  to  have  the  work  done  either  one  place  or 
the  other  and  preferably  at  the  college. 

Mr.  Thompson:  Assuming  that  you  would  have  this  work  done  at  the 
Agricultural  College,  what  saving  would  that  be  to  this  depart- 
ment? 

Mr.  Woodworth :  Why,  I  would  guess  that  our  dairy  work  costs  us 
110,000.00  a  year.  That  would  be  a  total  saving  to  this  department, 
but  it  would  cost  the  state  of  Michigan  $5,000.00. 

Mr.  Thompson:  So  it  would  be  a  saving  of  $10,000.00  to  this  depart- 
ment and  a  net  saving  of  $5,000.00  to  the  state? 

Mr.  Thompson :  Have  you  any  other  suggestions  as  to  dairy  work  that 
you  do  ? 

Mr.  Woodworth :  I  think  it  is  a  very  important  work  and  should  be 
extended.  It  is  work  that  pays  the  state  good  dividends  on  the 
investment,  but  I  think  it  should  be  done  at  the  college. 

Mr.  Lord:  Dr.  Olin,  Secretary  of  the  State  Board  of  Health,  took  up 
with  us  the  matter  of  centralizing  the  chemistry  work  of  the  state, 
along  the  lines  of  co-operation  between  his  department  and  yours. 
What  do  you  think  of  that? 

Mr.  Woodworth:  As  it  is  now,  we  are  running  two  laboratories,  one 
here  and  one  in  the  Board  of  Health.  In  all  laboratories,  the  ordi- 
nary equipment  is  standard  and  it  would  seem  to  me  as  though 
it  would  be  possible,  in  some  way,  to  combine  the  laboratories  and 
have  one  chemist  in  charge. 

Mr.  Lord:     What  other  state  activities  would  use  it? 

Mr.  Woodworth:  The  Securities  Commission  would  use  it  very  often; 
and  practically  every  department  has  some  problem.  For  instance, 
we  loan  a  man  to  the  Game  and  Fish  Department  to  investigate  the 
polution  of  streams. 

Mr.  Thompson :  Assuming  that  that  was  done,  would  the  "result  be  in 
a  saving  of  money  simply,  or  efficiency  of  service  also  ? 

Mr.  Woodworth :  It  would  tend  to  secure  a  better  and,  more  efficient 
man  for  a  position  of  higher  class,  of  course. 

Mr.  Thompson:     It  would  give  the  people  much  better  service  then. 

How  much  of  a  saving  would  be  effected  to  the  state? 
Mr.  Woodworth:     I  don't  know  just  the  cost  of  Dr.  Olin's  work.     I 
imagine  it  would  cut  off  one-third  of  the  total  present  expense  of 


164 

the  chemistry  and  bacteriological  work  in  both  departments. 

Mr.  Thompson :     About  how  much  is  that  expense  in  this  department  ? 

Mr.  Woodworth:  I  should  say  that  it  was  about  one-quarter  of  the 
expense  of  the  department,  probably  $10,000.00. 

Mr.  Thompson :  The  next  line  of  thought  is  inspections  and  duplica- 
tions of  them.  What  inspections  of  public  activities  should  be 
added  to  those  now  carried  on  by  the  state? 

Mr.  Woodworth :     You  mean  what  added  work  ? 

Mr.  Thompson :     Yes,  sir. 

Mr.  Woodworth:  I  think  there  are  quite  a  number  of  food  establish- 
ments that  are  not  covered  by  our  laws.  We  work  under  specific 
statutes.  Personally,  I  think*  it  would  be  much  better  if  our  food 
law  was  generally  remodeled  and  patterned  after  the  federal  law. 
In  that  case  it  would  simplify  our  work  a  great  deal. 

Mr.  Lord:  Your  supervisory  powers  to  be  more  general  instead  of 
specific  ? 

Mr.  Woodworth:  Yes.  We  have  never  felt  it  so  much  as  we  do  now. 
I  think  that  the  present  inspection  of  commercial  feeding  stuff, 
which  is  done  at  the  college,  should  be  done  here.  Our  equipment  is 
suitable  to  that  work.  It  is  practically  police  work,  and  that  part 
could  be  better  handled  by  us  and  the  educational  done  by  the 
college. 

Mr.  Thompson :  How  much  added  expense  would  that  be  to  your  depart 
ment? 

Mr.  Woodworth :  That  is  taken  care  of  by  fees.  I  think  also  that  there 
should  be  inspections  as  to  the  health  of  employes  in  every  foo< 
manufacturing  and  serving  establishment. 

Mr.  Lord :     Should  this  be  done  by  the  health  department  ? 

Mr.  Woodworth :  Well,  I  think  it  should  be  done,  but  in  any  way  yo\ 
please. 

Mr.  Thompson :     Is  there  anything  else,  Mr.  Woodworth  ? 

Mr.  Woodworth :  Under  the  new  law  passed  by  the  last  legislature,  w( 
have  a  general  provision,  copy  of  a  section  of  the  federal  law,  tha 
gives  us  sort  of  general  power.  Don't  know  of  anything  else. 

Mr.  Thompson:  How  would  you  suggest  that  inspections  now  made 
be  better  correlated  so  as  to  give  better  efficiency,  better  service  to 
the  public  and  save  money  to  the  taxpayers  ? 

Mr.  Woodworth :     Just  how  to  work  that  out,  I  don't  know,  but  it  i 
true  that  where  three  departments  inspect  in  the  same  place,  we 
doing  the  inspection  of  food  conditions;  the  labor  department,  the 
fire  escapes;  and  the  health  department  some  things,  I  have  won 
dered  if  it  would  not  be  possible  to  combine  that  work. 

Mr.  Lord :     The  fire  marshal's  department  makes  some  inspections. 

Mr.  Woodworth :  Yes,  I  guess  it  does.  Seems  as  though  one  man  coul< 
make  one  place  and  do  it  all. 

Mr.  Lord :  For  that  kind  of  work,  could  you  establish  a  central  bureau 
of  inspections? 

Mr.  Woodworth:     I  don't  know  whether  that  would  work  out  all  right 

or  not. 

Mr.  Thompson:  Suppose,  for  example,  your  department,  the  healtl 
department,  labor  department  and  fire  inspector's  department  wer 


165 

to  co-operate  and  correlate  your  work,  ought  you  not  to  be  able  to 
work  it  out  and  effect  a  saving? 

.r.  Woodworth :     Seems  to  me  that  it  would  be  possible  to  effect  quite 
a  saving  there,  and  certainly  would  bring  about  a  greater  efficiency, 
.r.  Thompson  :     Taking  on  of  that  class  of  inspections,  as  a  whole,  what 

proportion  of  costs  do  you  think  that  method  would  save? 
.r.  Woodworth:     Speaking  as  to  my  own  department,  I  would  say  it 

could  not  help  but  save  50  per  cent  for  that  class  of  work, 
.r.  O'Brien :     Would  it  not  be  75  per  cent  ? 

Woodworth:     It  might  be,  but  I  would  say  that  it  would  be  at 
least  50  per  cent. 

r.  Thompson:     Tell  us,   Mr.  Woodworth,  your  idea   of  the  effect  of 
prohibition. 

IMr.  Woodworth:  As  you  know,  the  last  legislature  has  put  the  enforce- 
ment of  the  liquor  law  in  our  department.  I  have  spent  most  of  my 
time  since  then  studying  the  question.  Kecently  I  was  in  West 
Virginia  and  looked  over  the  work  there.  It  is  a  considerable 
problem  as  to  what  that  enforcement  is  going  to  mean.  We  are 
wondering  just  how  much  expense  it  is  going  to  involve  and  how 
much  help. 

I  Mr.  Thompson :     You  have  no  idea  at  the  present  time? 

|Mr.  Woodworth:  I  imagine  that  the  way  it  will  work  out  is  that  we 
will  say  to  every  Prosecuting  Attorney  and  Sheriff,  "What  can  we 
do  to  help  you?"  and  it  will  be  our  experience  in  the  first  two  or 
three  months  that  we  will  have  to  base  our  work  on. 

i Mr.  Thompson:     It  probably  will  add  to  your  expense. 

I  Mr.  Woodworth:  The  legislature  left  the  expense  proposition  open  so 
that  our  expenses  are  authorized  by  the  Governor  and  paid  on  war- 
rant of  the  Auditor  General  out  of  the  general  fund. 

Mr.  Lord:  In  regard  to  the  enforcement  of  this  prohibition  law,  how 
many  additional  men  will  you  need  in  your  department  to  enforce 
this  law? 

I  Mr.  Woodworth:  In  West  Virginia  they  have  one  for  every  county,  or 
did  have  one  for  every  county,  but  now  they  are  finding,  after  the 
first  educational  period  has  passed,  that  they  have  comparatively 
little  to  do.  I  think  the  proper  thing  for  us  to  do  would  be  to  select 
about  one  man  for  each  congressional  district,  men  who  have  had 
proper  experience — ex-sheriffs,  for  instance.  There  will  be  a  whole 
lot  of  people  dissatisfied  with  the  Prosecuting  Attorneys'  and  Sher- 
iffs' work  and  we  will  have  to  have  someone  who  will  investigate 
those  complaints  and  then,  too,  we  will  have  to  look  after  the  ship- 
ment of  liquor  over  the  border.  Under  the  federal  law,  it  is  an 
offense  to  ship  into  a  dry  state  and  the  prosecutions  will  be,  of 
course,  in  the  federal  courts.  I  don't  think  the  employes  taken  on 
for  this  work  will  exceed  fifteen  men. 
Mr.  Lord :  What  will  you  pay  those  men ;  have  you  given  that  any 

thought? 
Mr.  Woodworth :     The  law  says  that  we  can  pay  them  up  to  $1,500.00  a 

year  and  expenses. 
Mr.  Lord :     As  a  rule,  what  are  the  expenses  of  that  class  of  a  man  ? 
Mr.  Woodworth:     The  expenses  of  our  inspectors  will  run  along  about 
$60.00  or  $70.00  a  month  each. 


166 

Mr.  Thompson:     Those  men  would  each  probably  cost  about  $2,500. 

a  year. 
Mr.  Woodworth:     Under  this  new  law  there  is  no  limit  placed  on  ou 

expenditures.    For  the  next  year  I  feel  that  it  is  up  to  me  to  be  ver; 

careful,  because  my  expenses  under  an  unlimited  law  will  be  mea 

ured  by  the  expenses  under  the  limited  law  of  last  year. 
Mr.  Lord:     Then  it  would  necessitate  at  least  fifteen  additional  men 

and  their  cost  would  not  be  less  than  f 40,000. 00  a  year,  anyway. 
Mr.  Woodworth:     No.     It  might  be  #60,000.00,  you  can't  tell.     I  don't 

feel  competent  to  make  an  estimate. 
Mr.  Lord:     What  other  expenses  would  be  incurred  in  connection  with 

that  law? 
Mr.  Woodworth :     Just  now,  I  don't  see  any.     There  is  going  to  be  a 

whole  lot  of  liquor  confiscated  in  Michigan  and  there  should  be  some 

plan  to  save  that  liquor  to  distill  the  alcohol  out  of  it. 
Mr.  Lord :     Your  department  last  year  cost  $48,288.00.     The  additional 

cost    of   the    enforcement    of    the    prohibition    law    will    be    about 

160,000.00.    It  will  be  safe  to  say,  then,  that  next  year  it  would  not 

cost  more  than  $1 10,000.00? 
Mr.  Woodworth :     I  don't  think  it  would. 
Mr.  Lord :     And  if  there  is  some  changes  made  in  the  work,  possibly 

1100,000.00  will  cover  the  cost? 

We  have  talked  about  your  outside  work.     How  about  your  office 

work?    What,  if  anything,  can  be  done  to  increase  the  efficiency  o 

your  department? 
Mr.  Woodworth :     That  is  a  line  of  which  I  am  not  nearly  so  competen 

to  judge  as  you  are. 

Mr.  Lord :     From  your  observation,  what  do  you  think  ? 
Mr.  Woodworth:     We  have  a  very  small  force,  only  four.     They  are 

quite  efficient.     The  chief  clerk  has  been  here  since  the  department 

was  formed  and  the  bookkeeper  was  appointed  under  Governor  Bliss. 

The  State  Accountant  tells  me  that  he  has  never  found  the  slightest 

thing  wrong  with  the  books  at  any  time.    We  have  a  janitor  and  we 

have  one  woman  who  works  part  of  her  time  in  the  laboratory  and 

part  of  her  time  here. 

Mr.  Lord:     Do  you  send  out  a  large  quantity  of  mail? 
Mr.  Woodworth :     Quite  a  good  deal. 
Mr.  Lord:     What  is  the  character  of  it? 
Mr.  Woodworth:     We  usually  get  out  perhaps  eight  or  ten  issues  o 

bulletins. 

Mr.  Lord:     How  many  in  an  issue? 
Mr.  Woodworth:     About  4,000. 

Mr.  Lord :     Are  they  mailed  to  the  same  people  all  the  time  ? 
Mr.  Woodworth :     A  good  deal  of  the  time.    We  have  an  addressograph. 
Mr.  Lord:     Does  it  belong  to  this  department? 
Mr.  Woodworth:     Yes.     Then  there  is  never  a  day  but  that  there  a 

about  twenty-five  or  fifty  copies  of  our  laws  go  out  and  we  wri 

and  refer  them  to  some  phases  of  the  law. 
Mr.  Lord:     What  would  you  think  of  a  central  mailing  division  whe 

these  bulletins  could  all  be  sent,  addressed  and  sent  out;  all  sta 

departments  to  use  this  mailing  division? 
Mr.  Woodworth :     Why,  I  don't  see  any  reason  why  we  could  not  do  oui 


167 

work  that  way.  I  would  simply  say  that  I  want  bulletin  number 
so  and  so  sent  to  list  number  so  and  so. 

LP.  Lord :  Have  you  examined  your  annual  report  very  closely  with  a 
view  of  cutting  it  down? 

LP.  Woodworth :  None  whatever.  However,  I  imagine  it  could  be 
done. 

Lr.  Lord :  In  looking  over  your  report,  it  occurred  to  me  that  it  could 
be  cut  down  at  least  one-half ;  and  then  people  would  be  more  liable 
to  read  it;  there  would  be  less  detail  and  it  would  be  a  considerable 
saving. 

Lr.  Woodworth:  I  will  take  my  report  and  analyze  it  and  then  I  will 
tell  you  what  I  think. 

Lr.  Lord:  I  wish  you  would  do  that.  Our  printing  is  costing 
1150,000.00  a  year  and  it  ought  to  be  cut  in  two. 

.r.  Woodworth:  One  reason  for  our  printing  is  the  educational  work 
in  the  dairy  business.  Our  report  would  be  comparatively  simple  if 
that  work  was  transferred  to  the  college. 

Lr.  Lord:  Take  the  statistical  part  of  the  report,  for  instance;  people 
are  not  particularly  interested  as  to  the  amount  a  certain  company 
pays  this  department,  but  they  are  interested  in  the  aggregate 
amount  collected  for  similar  services;  so  that  if  statistics  of  that 
character  were  published  in  the  aggregate  instead  of  in  detail,  people 
would  read  it,  whereas  they  don't  now,  and  your  report  would  be 
much  more  valuable. 

Woodworth :  I  don't  think  I  had  ever  studied  the  Dairy  and  Food 
Department's  report,  or  the  report  of  any  other  department,  before 
I  came  in  here. 

Thompson:  What  benefit  would  it  be  to  Michigan  if  all  the  mate- 
rials used  by  the  state  were  purchased  collectively  and  according  to 
specifications  ? 

Woodworth :  The  state  would  get  all  the  benefit  that  is  secured 
from  purchasing  in  large  quantities  and  the  added  security  of  know- 
ing exactly  what  is  delivered.  It  would  serve  to  bring  a  benefit  in 
one  way  or  the  other,  or  probably  both ;  either  a  lower  price  or  better 
quality. 

Thompson :  To  what  extent  do  you  think  it  would  save  money  by 
purchasing  collectively? 

Woodworth:     It  is  hard  to  estimate  that.     I  have  talked  to  whole- 
sale grocers  who  have  stated  that,  on  purchases  as  large  as  the  state 
makes,  they  could  save  them  10  per  cent,  at  least. 
Thompson :     Have  you  any  suggestions  as  to  the  plan  that  should  be 
pursued  to  organize  centralized  state  purchasing  system? 
Woodworth:     My   own   opinion   is   that   all   purchases   should   be 
passed  over  to  a  state  head  and  every  institution  should  present 
what  they  think  their  requirements  will  be.     If  it  appeared  to  the 
purchasing  head  that  it  is  not  correct,  it  should  be  called  to  their 
attention  with  a  view  of  cutting  it  down. 


168 

GAME,  FISH  AND  FOREST  FIKE  COMMISSIONER 

Mr.  Lord :  You  are  the  Game,  Fish  and  Forest  Fire  Commissioner,  Mr. 
Baird? 

Mr.  Baird :      Yes  Sir. 

Mr.  Lord:  Will  you  make  a  statement  to  the  Budget  Commission  rela-i 
tive  to  the  various  activities  of  your  department? 

Mr.  Baird:     Well,  in  what  way? 

Mr.  Lord :  Tell  us  the  nature  of  your  work,  what  have  you  accomplished, 
what  the  benefits  are  to  the  people  of  the  state,  what  you  are  doing 
now,  what  your  plans  are  for  the  future,  and,  if  you  have  in  mind 
any  changes  to  be  made  to  the  law  relating  to  the  game  and  fish  bus- 
iness in  Michigan,  please  state  them. 

Mr.  Baird:  I  would  rather  have  the  chief  clerk  state  that,  he  is  more 
familiar  than  I  am  with  that  line. 

Mr.  Lord:     Mr.  Hoyt,  what  position  do  you  hold? 

Mr.  Hoyt :     I  am  the  chief  clerk  of  the  department. 

Mr.  Lord:  Will  you  state  to  the  Budget  Commission  the  various  activ-: 
ities  of  the  game  warden's  department,  what  it  lias  accomplished, ; 
what  the  benefits  are  to  the  people  of  Michigan,  and  what  it  proposes ' 
to  accomplish  in  the  future,  etc. 

Mr.  Hoyt :  It's  main  object  is  the  conservation  of  wild  life.  It  also  has 
the  duty  of  the  prevention  of  forest  fires  in  the  state. 
During  the  last  five  or  six  years  the  activities  of  the  department  havei 
been  along  the  lines  of  enforcing  the  laws  relative  to  preserving  the 
game  in  the  fields  and  the  fish  in  the  waters  of  the  state,  and  we 
have,  for  that  purpose,  Deputy  Game  and  Fish  Wardens,  whose 
duties  are  to  enforce  the  laws.  As  a  result  of  their  activities,  there 
has  been  from  one  thousand  to  one  thousand  eight  hundred  convic- 
tions in  the  state  for  violation  of  the  game  and  fish  laws  every  year ; 
during  the  past  year,  I  think  it  will  go  much  more  than  that. 
Prior  to  1911,  this  department  could  only  employ  ten  deputy  wardens 
for  the  enforcement  of  the  laws,  and  the  funds  at  the  disposal  of  the 
department  were  very  limited,  being  those  which  accrued  from  the 
sale  of  deer  hunting  licenses,  and  when  funds  were  exhausted,  the  ac- 
tivities of  the  department  ceased,  as  we  had  no  appropriation  from 
the  state.  When  the  department  was  first  organized,  it  had  a  stand- 
ing appropriation  of  f 2,000.00  a  year,  and- during  Mr.  Chapman's 
first  term  as  State  Game  Warden,  he  decided  not  to  use  any  of  this 
12,000.00,  and  it  was  turned  back,  or  in  other  words,  it  was  not  used. 
All  the  funds  he  used  were  the  funds  coming  from  the  sale  of  licenses. 
In  1911,  I  think  it  was,  a  new  hunting  license  law  was  passed  which 
provided  that  any  person  hunting,  outside  of  the  county  in  which  he 
lived,  should  take  out  a  hunting  license.  This  increased  the  proceeds 
of  the  department  to  such  an  extent  that  the  law  was  changed 
so  that  more  deputies  could  be  employed.  This  fund  was  some- 
what limited,  but  it  did  give  us  a  chance  to  perform  more  work,  em- 
ploy more  men,  and  look  after  the  commercial  fishing  interest  of  the 
state  and  inland  fish  as  well  as  the  game  of  the  state.  In  1913,  this 
law  was  changed  so  that  it  included  all  persons  when  hunting  for 
protected  game,  both  residents  and  nonresidents.  This  change  in 
the  law  gave  the  department  more  funds,  more  deputies  were  em- 
ployed and  the  deputies  employed  were  kept  in  service  during  the 


169 

entire  year,  and  much  better  results  were  obtained  under  the  oper- 
ation of  this  law  after  it  was  amended.  In  1917,  or  rather  before 
the  Legislature  of  1917  convened,  Mr.  Gates  was  state  Game  War- 
den and,  owing  to  the  fact  that  the  work  of  the  department  had 
increased,  he  conceived  the  idea  of  making  the  department  self-sus- 
taining. He  prepared  a  bill  and  presented  it  to  the  Legislative  com- 
mittee, placing  the  department  upon  a  self-sustaining  basis.  After 
the  law  was  enacted  and  became  operative,  all  expenses  of  this  depart- 
ment, including  office  expenses,  printing  expenses,  field  work,  cleri- 
cal expense,  etc.,  have  been  paid  from  this  fund  into  which  all  of  the 
different  proceeds  have  been  credited,  and  the  state  has  not  been 
called  upon  since  that  time  to  pay  any  of  the  expenses  of  the  depart- 
ment. 
Mr.  Lord :  You  say  it  is  self-sustaining.  Do  you  draw  any  money  from 

the  general  fund  for  any  purposes  at  all,  salaries,  etc  ? 
Mr.  Hoyt :     None  whatever. 

Mr.  Baird:  There  are  really  two  departments  here.  One  is  the  Fire 
Department,  the  expense  for  the  operation  of  which  is  drawn  from 
the  general  fund  of  the  state.  The  entire  salary  of  the  game  depart- 
ment is  now  paid  from  fees,  but  the  iire  department  salaries  are  paid 
by  appropriation  from  the  legislature. 

Mr.  Hoyt:  Prior  to  1911,  there  was  an  appropriation  of  $10,000.00  a 
year  for  the  purpose  of  extinguishing  and  preventing  forest  fires. 
We  found  that  the  fund  was  not  sufficient  to  take  proper  care  of  the 
work  of  prevention  of  forest  fires.  In  1915  that  law  was  amended 
and  an  appropriation  of  $20,000.00  was  made  for  this  purpose.  Every 
Supervisor  in  a  fire  zone  is  a  fire  warden  who  performs  certain  ser- 
vices, employs  certain  men,  at  times  when  it  is  necessary  to  extin- 
guish fires.  That  expense  was  increasing,  so  that  the  fund  was  in- 
creased in  1917  to  $40,000.00.  That  amount  is'  divided  equally 
between  the  northern  and  southern  peninsula  fire  zones. 
Mr.  Lord :  Where  do  you  draw  the  line  on  the  two  fire  zones  ? 
Mr.  Hoyt:  The  Straits  of  Mackinac.  The  upper  peninsula  constitutes 

one  zone  and  the  lower  peninsula  the  other. 

Mr.  Lord:  Under  how  many  specific  statutory  measures  are  you  oper- 
ating ?  There  are  a  number  of  laws  governing  your  department ;  tell 
us  about  them,  what  they  are  ? 

Mr.  Hoyt :  We  have  one  act  which  defines  the  powers  and  duties  of  the 
department,  in  connection  with  the  Public  Domain  Commission; 
We  have  a  general  game  law  which  provides  for  the  protection  of 
game  in  the  state ;  we  have  a  general  fish  law  which  provides  for 
the  protection  of  fish  in  the  inland  waters  of  the  state;  we  have 
a  general  commercial  fishing  act  which  provides  for  the  protec- 
tion of  the  fish  in  the  Great  Lakes;  then  we  have  numerous  local 
acts  which  apply  to  certain  sections  or  localities  in  the  state  relative 
to  fish.  We  have  a  special  act  which  provides  for  the  taking  of  fish' 
from  the  inland  waters  of  the  state  on  petition ;  we  have  an  act  which 
provides  that  people  can  spear  steel-head  trout  at  a  certain  time  of  the 
year,  under  regulations  of  the  department,  and  for  which  they  pay  a 
license ;  We  have  an  act  which  provides  for  the  taking  of  white  fish 
and  cisco  in  inland  waters  during  a  certain  time  of  the  year;  also 
the  law  provides  that  certain  permits  may  be  issued  for  other  pur- 


170 

poses  by  the  department,  for  which  a  fee  is  paid ;  we  have  a  new  law, 
passed  by  the  last  legislature,  known  as  the  "breeder's  act,"  which 
provides  that  any  person  who  desires  to  enter  into  the  raising  of 
game,  may,  under  certain  regulations,  sell  game  that  is  raised  in  1hat 
manner;  persons  operating  under  that  law  must  be  licensed  by  this 
department  and  the  activities  are  under  the  supervision  of  thig 
department;  the  last  legislature  also  passed  an  act  which  was  termed 
the  "discretionary  power  act,"  placing  power  in  the  hands  of  the  ( \>m- 
missioner,  on  approval  of  the  Public  Domain  Commission,  to  close 
certain  seasons  which  have  been  made  open  by  legislation,  for  the 
purpose  of  conserving  any  specie  of  game  which  is  liable  to  become 
extinct  by  climatic  conditions.  Mr.  Baird,  since  he  has  had  charge 
of  the  office,  has  acted  on  this  provision  of  law  and  closed  the  season 
on  deer  in  Mason,  Newaygo,  Lake  and  Emmet  counties.  He  has  also 
closed  the  season  on  beaver  in  the  lower  peninsula  and  the  hunting 
of  partridge  in  Crawford  and  Iron  counties. 

Mr.  Lord :     Is  closing  the  season  in  the  various  counties  done  on  you! 
own  initiative  or  on  petition? 

Mr.  Hoyt :     On  petition  of  the  Board  of  Supervisors. 

Another  duty  imposed  by  law  upon  this  commission  is  the  taking  of] 
spawn  during  the  spawning  season,  of  certain  kinds  of  fish,  and? 
turning  the  same  over  to  the  State  Fish  Commission  and  the  United: 
States  Bureau  of  Fisheries.  The  commissioner  is  required  to  make 
such  rules  and  regulations  as  he  shall  deem  advisable.  We  have  in- 
past  years  taken  white  fish  in  the  Detroit  River,  saved  the  same  un- 
til they  have  been  ready  to  spawn  and  then  have  turned  them  over  to 
the  Michigan  Fish  Commission.  They  have  been  stripped  and  eggs; 
placed  in  hatcheries  of  the  state  or  Federal  Government,  and  then 
planted  back  in  the  waters  of  Michigan. 
This  year,  the  commission  has  opeated  under  a  new  theory. 
During  the  spawning  season  for  trout  and  white  fish,  owing  to  the 
fact  that  there  was  a  scarcity  of  food,  we  decided  to  let  all  commer- 
cial fishermen,  who  were  fishing  after  the  fish  became  ready  to  spawn, 
take  these  fish  and  turn  them  over  to  the  state,  and  they  were  paid  a 
certain  price  per  pound  for  the  fish.  The  fish  were  stripped  and  eggs 
turned  over  to  the  hatcheries.  There  has  never  been  a  time,  in  the 
history  of  Michigan,  when  hatcheries  have  been  as  well  supplied  as 
they  are  this  year.  We  expect  to  have  good  results  from  these  hatch- 
eries. Mr.  Baird  found  on  investigation,  before  starting  into  this 
good  work,  that  the  big  producers,  as  they  call  themselves,  Booth  and 
Bobbins,  were  handling  very  nearly  all  the  fish  caught  in  Michigan 
waters  and  that  at  least  forty  per  cent  of  which  never  found  a  market 
in  Michigan  until  after  they  were  shipped  into  the  state  from  Chicago 
or  from  some  other  place  outside  of  the  state. 

Mr.  Lord :     What  brought  about  such  a  condition  as  that  ? 

Mr.  Hoyt:  We  couldn't  tell.  We  know  it  was  not  a  legitimate  propo 
sition.  These  fish  were  turned  over  to  these  big  corporations  because 
it  was  the  easiest  way  for  them  to  dispose  of  them  in  most  cases- 
They  have  agents  who  took  the  fish  when  they  came  to  shore  anc 
paid  for  them  immediately,  although  the  price  was  small,  but  tht 
fishermen  were  glad  to  do  it. 


171 

Mr.  Lord:  Do  these  corporations,  or  big  producers,  have  any  exclus- 
ive fishing  rights  ? 

Mr.  Hoyt:     No. 

I  Mr.  Lord:  The  fact  remains,  however,  that  all  these  big  corporations 
got  all  the  fish  and  that  very  little  reached  our  markets. 

Mr.  Hoyt:  When  Mr.  Baird  took  office,  we  found  that  markets  were 
getting  26  cents  per  pound  for  trout  and  from  20  to  30  cents  for  white 
fish.  Mr.  Baird  succeeded  in  getting  over  200,000  pounds  of  fish 
which  he  put  in  the  markets  of  the  state  and  which  was  sold  at  12 
and  13  cents  per  pound.  That  price  provided  a  profit  to  the  seller, 
and  also  a  better  price  to  the  fishermen  than  they  had  been  receiving. 
People  were  furnished  in  twenty  days  200,000  pounds  of  fish. 

Mr.  Lord :     Do  you  propose  to  carry  on  the  same  work  in  the  future  ? 

Mr.  Hoyt :     I  think  that  is  the  idea. 

Mr.  Lord :  Is  that  one  of  the  means  that  you  intend  to  follow  to  crush 
this  monoply? 

Mr.  Hoyt:  We  believe  that  there  should  be  a  campaign  of  education 
both  with  consumers  of  fish  and  fishermen.  A  fisherman  must  be  edu- 
cated to  the  fact  that  the  fish  that  he  is  taking  belong  to  the  people 
of  the  state,  and  another  thing  is  to  educate  the  people  of  the  state 
to  eat  fish.  That  has  been  done  this  fall.  We  put  fish  in  certain 
places,  especially  in  Lansing,  and  a  ton  of  fish  would  last  only  one 
hour  and  people  left  standing  in  line  to  buy  when  the  fish  were  all 
gone.  When  they  found  they  could  buy  fish  cheaper  than  meat,  they 
began  to  ask  for  them.  In  Saginaw  they  had  a  ton  of  fish  that  lasted 
thirty-three  minutes.  We  put  thirty  tons  of  fish  in  Detroit  which 
were  sold  in  seven  days,  and  the  only  trouble  was  we  did  not  have 
the  facilities  for  distributing;  we  had  to  have  policemen  in  line  to 
keep  the  crowd  back. 

Mr.  Lord :  It  is  a  fact,  Mr.  Hoyt,  that,  notwithstanding  the  activities 
of  the  game  warden's  department,  our  people  have  been  paying  a 
larger  price  for  fish  than  they  did  ten  years  ago.  Isn't  there  some 
weakness  in  the  law  ?  Anyway,  such  a  condition  ought  not  to  exist. 

Mr.  Hoyt :  The  weakness  in  the  law  comes  from  this  fact ;  that  the  peo- 
ple whose  fish  are  being  taken  have  had  no  say  as  to  what  the  law 
should  be. 

Mr.  Lord:  In  other  words,  you  think  that  it  is  special  fish  interests, 
such  as  the  Booth  interest,  that  get  the  laws  through  the  legislature. 

Mr.  Hoyt :     Well,  the  fishermen  themselves  are  selfish  people. 

Mr.  Lord:  It  is  the  intention  of  this  department  to  carry  on  a  cam- 
paign of  education  and  teach  the  people  of  Michigan  so  that  they  will 
better  know  what  the  fish  business  means  to  them  and  their  rights 
in  regard  to  it. 

Mr.  Hoyt :     I  think  so. 

Mr.  Lord:  What  would  you  do,  or  could  be  done,  by  way  of  legisla- 
tion to  improve  conditions? 

Mr.  Hoyt :     I  would  place  the  whole  matter  in  the  hands  of  this  depart- 
ment with  authority  to  set  prices  to  the  fishermen  and  authority  to 
fix  the  prices  to  the  consumer,  and  provide  means  and  methods  of 
distribution. 
Mr,  Lord ;    Would  you  license  people  who  sell  fish? 


172 

Mr.  Hoyt:  No,  no  one  except  the  man  who  goes  out  and  takes  th< 
people's  fish. 

Mr.  Lord:     How  could  you  enforce  the  law  unless  you  had  a  licem 
system?    Some  people  would  be  selling  fish  for  18  cents  and  soim 
people  for  20  cents  per  pound. 

Mr.  Hoyt:     If  we  find  that  the  dealer  does  not  sell  at  the  price  we  se1 
we  will  have  to  stop  sending  him  fish.    We  have  told  people  this  fall 
that  they  could  sell  the  fish  provided  that  they  do  certain  things 
and  told  them  that  when  they  didn't  do  those  things,  they  would  no1 
get  any  fish.    We  fixed  the  limit  and  told  them  they  couldn't  be  sol< 
for   more    than    a    certain    amount.     We    fixed    the    prices    at    an 
amount  where  they  would  make  some  money,  and  where  it  would 
an  object  to  the  fishermen  to  furnish  the  fish.    If  we  had  the  powei 
to  say  to  the  fishermen  "you  can  fish  provided  you  sell  the  fish  to  ui 
at  a  certain  price,  and  if  you  don't  do  so,  you  will  have  to  stop  fish  i  113 
or  we  will  stop  you,"  then  we  could  regulate  the  retail  of  the  fish 
saying  "you  can  sell  the  fish  as  long  as  you  do  certain  things." 

Mr.  Lord :     Isn't  it  a  fact  that  foreign  corporations  come  into  our  stal 
hire  the  fishermen  and  contract  for  the  delivery  of  all  fish  they  catch? 

Mr.  Hoyt :     I  think  that  is  true. 

Mr.  Lord :     Isn't  there  someway  by  which  that  business  could  be  curbed  ? 

Mr.  Hoyt :     I  think  there  is ;  that  is  a  matter  for  the  legislature. 

Mr.  Lord:  I  should  think  it  would  be  a  very  important  thing  for  this 
department  to  take  up  with  the  members  of  the  legislature.  It  take 
men  who  have  made  a  study  of  it,  like  yourselves,  to  make  recom- 
mendations. 

The  fact  remains  that  the  outside  people  get  most  of  the  fish  am 
and  what  little  we  get  we  pay  altogether  too  much  for. 

Mr.  Hoyt :  My  idea  is  that  if  it  can  be  done  in  one  state,  it  can  be  don< 
in  another.  In  California  they  are  making  a  success  of  handling  th( 
fish  business. 

Mr.  Thompson :     How  do  they  handle  it  ? 

Mr.  Hoyt:     It  is  all  placed  in  the  hands  of  the  Fish  Commission  an< 
they  are  given  authority  to  regulate  the  sale  and  distribution, 
department  would  have  to  be  equipped  with  funds  and  men  enougl 
so  that  they  could  do  some  of  the  things  that  big  corporations  ai 
doing  now.    We  have  not  the  money  now  to  go  out  and  buy  the  twine 
like  the  Booth  people  have,  who  say  to  the  fishermen  "why,  we  will 
furnish  you  all  the  twine,  and  you  give  us  a  mortgage  on  your  outfit." 
Now,  the  department  would  have  to  be  in  a  position  to  help  those 
fellows. 

Mr.  Lord:  Your  idea  would  be  to  give  the  department  general  super- 
visory powers  over  the  fish  business.  I  think  that  is  a  pretty  good 
suggestion.  Surely  something  ought  to  be  done.  There  has  been  a 
good  deal  of  complaint  on  the  part  of  the  citizens  of  Michigan  about 
the  fish  being  shipped  out  of  the  state  and  Michigan  people  not  get- 
ting them. 

Mr.  Hoyt:  Just  to  show  you  what  has  been  done.  The  great  catch  of 
trout  is  in  November ;  fishermen  go  out  then  and  bring  in  tons  of  fish 
where  they  would  not  get  one  hundred  pounds  at  other  times.  These 
big  people  have  taken  advantage  of  this.  Four  years  ago,  the  price 
they  gave  to  the  fishermen  was  four  cents  per  pound.  The  fishermen 


173 

who  got  the  fish  got  large  trout  and  they  made  them  take  the  heads  off 
and  then  paid  them  cash  at  the  rate  of  four  cents  per  pound  for  the 
bodies.  These  fish  were  placed  in  col<l  storage  and  when  they  came 
out  in  December  or  January,  they  came  out  to  retail  markets  at  six- 
teen or  eighteen  cents  a  pound.  Two  years  ago,  they  thought  they 
would  have  to  give  the  fishermen  a  little  more  and  then  gave  them 
six  cents.  This  year,  we  offered  them  ten  cents,  and  after  we  had 
done  this,  we  found  that  they  had  new  contracts  with  the  big  corpor- 
ations for  nine  cents.  Immediately,  that  they  found  out  what  we 
were  offering,  they  offered  one  cent  more  than  we  did.  There  isn't 
any  doubt  but  that  they  have  taken  advantage.  They  could  make  the 
price  better  any  time  they  so  said. 

Mr.  Hoyt :  Mr.  Baird  has  started  out  on  new  work  again  this  fall ;  may- 
be he  would  prefer  to  tell  you  himself. 

Well,  we  find  that  certain  inland  lakes  of  the  state  contain  fish  which 
can't  be  taken  by  hook  and  line,  white  fish  or  cisco,  and  we  find  that 
some  of  the  inland  lakes  of  the  state  are  reported  to  be  filled  with 
that  kind  of  fish.  Mr.  Ellsworth  of  Chicagan  Lake  sent  us  samples  of  a 
fish  which  we  called  white  fish.  They  are  a  beautiful  fish,  but  in 
scaling  I  found  that  the  scale  was  four  or  five  times  as  large  as 
white  fish.  They  are  very  valuable  and  have  a  splendid  flavor  and  are 
very  plentiful.  His  idea  would  be,  I  think,  to  take  the  fish  from  these 
lakes  and  see  that  the  public  and  consumer  gets  them  at  a  reasonable 
price. 

Mr.  Baird :  There  was  a  law  on  the  statute  books,  which  was  repealed, 
that  I  want  to  call  your  attention  to.  It  provided  that  fish  caught  in 
inland  lakes  and  rivers  of  the  state  could  not  be  shipped  out  of  the 
state.  It  was  on  the  statute  books  for  years  and  years,  and  I  think 
was  repealed  by  mistake. 

A  lot  of  people  have  been  writing  in  here  about  those  fish,  Upper 
Peninsula  people  in  particular.  They  have  taken  it  up  with  the 
national  government,  and  we  have  letters  asking  if  we  could  possibly 
allow  the  fish  to  be  taken  out  of  those  lakes,  but  it  is  against  the  law 
to  take  them  out. 

Mr.  Lord :  As  to  the  work  that  you  do  and  the  work  the  Fish  Commis- 
sion does,  is  there  any  duplication  of  effort  anywhere? 

Mr.  Hoyt:  There  is  no  duplication,  but  the  fact  remains  that  we  could 
do  the  work  that  the  Michigan  Fish  Commission  is  doing  probably 
with  the  same  force  we  have  now  and  do  it  quicker  and  better. 

Mr.  Lord :  And  what  saving  do  you  think  that  would  be  to  the  State  of 
Michigan  ? 

Mr.  Hoyt :  Well,  I  think  it  would  be  a  saving  in  more  ways  than  one. 
There  would  be  a  saving  in  the  distribution  of  fish.  My  theory  is 
that  fish  have  not  been  properly  distributed  in  the  past,  and  I  am 
basing  that  on  what  I  have  seen.  Last  fall  I  had  a  case  to  attend  to 
in  Holland,  and  I  saw  fish  that  had  been  sent  there  that  had  not  been 
called  for.  I  saw  a  local  deputy  and  asked  him  about  it  and  he  said 
the  man  who  had  ordered  them  was  away,  and  examining  them  I 
found  that  out  of  eighteen  cans  of  fish  only  one  can  had  a  live  fish  in 
it.  I  have  no  doubt  that  that  condition  exists  in  other  places,  and 
the  Fish  Commission  is  not  responsible  for  it.  But,  we  believe  there 
ought  to  be  a  man  at  every  station  where  fish  are  unloaded,  in  order 


174 

to  get  the  fish  in  the  water  immediately  when  taken  from  the  trains. 
Also,  I  think  that  these  young  fish,  not  old  enough  to  care  for  them- 
selves, ought  to  be  planted  in  places  most  favorable,  near  the  shores 
where  larger  fish  can't  get  to  them  and  give  them  a  chance  to  grow. 

Mr.  Lord:  You  say  you  can  handle  that  work  with  practically  the 
same  force  you  now  have.  Certainly  that  would  mean  a  considerable 
Saving  in  money  to  the  state. 

Mr.  Hoyt:  Well,  I  don't  mean  with  the  same  force,  we  would  have  to 
have  an  addition  to  our  force. 

Mr.  Lord :  Is  there  really  any  sense  in  having  two  fish  commissions  in 
Michigan? 

Mr.  Hoyt :     Not  in  my  judgment. 

Mr.  Baird:  Really,  we  are  in  bad  shape  on  that  fish  commission  busi- 
ness. If  we  are  going  to  have  a  Public  Domain  Commission  at  all, 
that  Public  Domain  Commission  ought  to  know  what  class  of  fish 
is  in  all  the  inland  lakes  so  that  they  can  tell  what  fish  are  in  certain 
lakes.  We  get  word  from  this  county  and  that  county  regarding 
different  kinds  of  fish.  There  surely  ought  to  be  some  record  kept  of 
the  fish  in  all  the  lakes  in  Michigan. 

Mr.  Lord:  Isn't  it  a  fact  that  the  State  Game  and  Fish  Department 
should  be  the  department  to  keep  that  record? 

Mr.  Baird :     I  think  it  ought  to  be  in  one  department. 

Mr.  Hoyt:  I  think  there  should  be  a  system  of  licensing,  that  is  a 
certain  amount,  perhaps  it  is  large  enough  now,  $  1.00,  for  every  per- 
son who  wants  to  hunt,  trap  or  fish.  That  fund  would  be  sufficient 
to  do  all  the  work  of  the  Michigan  Fish  Commission,  all  the  work  of 
this  department,  without  asking  the  State  of  Michigan  for  an  appro- 
priation. What  I  mean  is  that  anybody  who  wants  to  go  out  and 
hunt  and  fish  in  inland  streams  should  have  one  license  to  include  it 
all.  That  would  probably  increase  our  revenue  $40,000.00  a  year, 
perhaps  more. 

Mr.  Lord  :  Take  a  man  that  goes  out  and  hunts  and  fishes ;  is  the  license 
fee  you  collect  now  enough  to  commensurate  the  loss  to  the  people  of 
the  state  for  the  game  and  fish  he  gets? 

Mr.  Hoyt:  Yes;  of  course  for  deer  hunting  there  would  be  another 
license  and  that  is  $1.50  for  residents  of  the  state. 

Mr.  Lord:     What  fee  do  you  charge  a  non-resident  for  shooting  deer? 

Mr.  Hoyt:     f 25.00. 

Mr.  Lord:  Don't  you  think  that  $10.00  would  be  a  reasonable  fee  to 
charge  a  resident  of  the  State  of  Michigan  for  the  same  privilege? 

Mr.  Baird :     Every  pound  of  deer  that  a  man  gets  costs  him  $10.00 

Mr.  Lord:  He  is  nevertheless  taking  something  that  belongs  to  all  the 
people.  He  is  paying  now  for  the  privilege  or  sport ;  he  isn't  paying 
anything  for  the  game  he  shoots  and  takes  home  with  him. 

Mr.  Hoyt :  Another  point  that  I  intended  to  bring  out  is,  the  distri- 
bution and  sale  of  non-resident  angler's  licenses.  They  are  now  dis- 
tributed by  the  Michigan  Fish  Commission  and,  when  they  get 
through  distributing  them,  they  are  done;  they  have  not  a  man  in 
the  field  to  see  whether  people  are  fishing  without  a  license  or  not. 
They  know  nothing  about  the  situation  only  that  the  money  comes 
in  for  the  license.  If  that  was  with  our  department,  we  would  have 
a  man  investigating,  as  we  do  now.  We  go  out  on  the  lakes  on  patrol 


175 

duty  and  we  collect  more  money  for  the  Fish  Commission  through 
our  deputies  than  they  collect  themselves.    We  don't  get  all  of  them, 
but  we  get  a  great  many  that  they  couldn't  get. 
Mr.  Lord :     They  issue  the  license  and  collect  the  fee  and  it  is  up  to  you 

to  enforce  the  law,  is  that  it  ? 
Mr.  Hoyt :     Yes  sir. 

Mr.  Lord :  Is  there  any  conflict  anywhere  between  the  work  of  the  Fish 
Commission  and  that  of  this  department,  other  than  you  have  stated 
now? 

Mr.  Hoyt :  Well,  I  don't  think  there  is.  We  mentioned  the  fact  of  prop- 
agating fish  and  planting  in  inland  waters.  We  think  they  ought  to 
do  it  rather  than  the  government. 

Mr.  Lord :     What  have  you  to  say  concerning  the  hatcheries  ? 
Mr.  Hoyt :     We  have  not  enough.    We  have  hatcheries  enough  for  white 
fish  and  trout,  but  we  ought  to  be  hatching  herring,  wall-eyed  pike, 
perch,  blue  gills,  etc. 

Mr.  Lord :  Tell  us  what  plans  you  have  for  the  future  in  order  to  con- 
serve the  game  and  fish  of  Michigan,  and  in  order  that  residents  of 
Michigan  can  get  what  is  their  due  by  way  of  fish  caught  in  our  own 
waters  ? 

Mr.  Hoyt :     Our  plan  would  be  to  see  that  the  laws  are  better  enforced, 
if  possible,  and  that  a  greater  production  of  fish  is  placed  in  the 
waters.    I  think  the  main  thing  is  to  see  that  more  fish  are  hatched 
and  more  planted,  as  far  as  fish  in  the  inland  waters  are  concerned. 
The  kind  of  fish,  taken  by  ninety  per  cent  of  the  people  throughout 
the  rural  districts  of  Michigan,  are  not  being  hatched  at  the  present 
time.    The  activities  should  be  extended  along  the  line  of  producing 
these  fish  and  placing  them  in  the  waters  for  people  to  catch. 
Mr.  Lord :     Is  that  grade  of  fish  decreasing  rapidly  ? 
Mr.  Hoyt:     In  some  localities.    That  is  due  to  the  fact  that  these  fish 
have  been  sold.    Two  years  ago  the  sale  was  stopped  and  I  think  that 
now  the  fish  will  increase. 
Mr.  Lord :     What  is  your  system  in  the  matter  of  the  distribution  of  your 

deputies  ? 

Mr.  Hoyt:  We  have  them  in  localities  where  their  work  can  be  most 
productive.  That  is,  we  have  a  man  located  in  Jackson  who  looks 
after  Jackson  County,  part  of  Lenawee  and  Hillsdale  counties  and 
also  part  of  Ingham.  Now,  he  has  had  too  much  territory;  he 
couldn't  get  over  all  the  territory  he  had  and  see  that  the  law  was 
properly  enforced.  Mr.  Baird  has  now  placed  another  man  in  that 
territory  and  that  will  help  us  enforce  the  law.  We  have  a  man  at 
Ann  Arbor  who  has  part  of  three  or  four  counties  and  he  would  have 
all  he  possibly  could  do  in  one  county. 
Mr.  Lord :  Who  looks  after  their  activities  ? 
Mr.  Hoyt:  Mr.  Baird  and  Mr.  Jones.  The  deputies  in  these  districts 

devote  their  entire  time  to  the  work. 
Mr.  Lord :     How  are  they  paid  ? 

Mr.  Hoyt :     By  the  day.    They  fill  out  a  report  card  every  night  showing 
what  their  activities  have  been  during  the  day  and  what  they  expect 
to  do  the  next  day,  and  send  it  to  this  department. 
Mr.  Lord :     Do  the  deputies  collect  any  money  ? 


176 

Mr.  Hoyt :  Only  for  payment  of  licenses ;  they  are  under  bond  and  they 
pay  or  turn  the  money  in  to  the  department  every  month. 

Mr.  Lord :     Do  they  do  any  other  kind  of  work? 

Mr.  Hoyt:  Not  to  our  knowledge.  We  have  deputies  that  during  the 
summer  months  in  the  fire  zone,  help  protect  fires ;  their  duties  being 
just  as  much  to  protect  fires  as  to  protect  game. 

Mr.  Lord :     What  salary  do  they  get  ? 

Mr.  Hoyt :     The  salary  is  fixed  by  law,  from  $2.50  to  $4.00  a  day. 

Mr.  Lord:  It  is  up  to  your  department  to  say  how  salaries  shall  be 
distributed  among  the  deputies. 

Mr.  Hoyt :  That  is  to  be  distributed  by  the  merit  system.  We  keep  track 
of  the  work  of  every  deputy  and  we  know  whether  his  work  is 
effective  or  not.  If  he  is  a  good  deputy  and  in  the  field  all  the  time 
getting  results,  he  is  entitled  to  more  money,  and  as  lie  advances,  his 
salary  is  increased.  In  fact,  we  have  not  very  many  deputies  in 
the  field  now  but  what  are  well  trained.  Most  of  them  have  had 
from  one  to  several  years'  experience.  Some  of  them  have  been  with 
us  several  years — one  sixteen  years. 

Mr.  Lord :     What  vacations  do  you  allow  them  ? 

Mr.  Hoyt:     None. 

Mr.  Lord:  Does  that  cover  all  your  activities  in  the  game  and  fish 
department? 

Mr.  Hoyt :     Practically  all. 

Mr.  Lord:     Can  you  tell  us  about  the  forest  fire  department? 

Mr.  Hoyt:  I  presume  we  can  find  someone  that  can  give  you  better 
information  as  to  that  than  I.  I  know  it  in  a  general  way. 
Our  part  in  the  forestry  work  simply  relates  to  the  forest  fires,  or 
rather  the  prevention  of  forest  fires.  This  work  is  mostly  carried  on 
during  the  summer  months,  from  the  month  of  April  to  the  month 
of  November. 

In  the  spring  of  the  year,  after  the  supervisors  are  elected,  we 
commence  gathering  the  names  of  the  supervisors  in  every  township 
in  the  state  in  the  fire  zone,  and  we  send  them  a  circular  letter  tailing 
attention  to  the  law  and  their  duties  in  connection  with  forest  fires. 
We  send  them  fire  posters  to  be  posted  in  their  townships,  and  send 
them  other  printed  matter  which  can  be  distributed,  cautioning 
sportsmen  and  residents  against  starting  fires  during  dry  and  dan- 
gerous times. 

After  this  organization  is  completed,  special  fire  wardens  are 
appointed  in  different  townships  where  there  are  no  regular  super- 
visors elected;  that  is,  in  unorganized  townships.  The  supervisor 
immediately  posts  his  township  and  takes  such  measures  as  he  deems 
advisable  to  caution  people  against  starting  fires.  By  the  law, 
ten  fire  wardens  can  be  appointed.  One  of  his  duties  is  to  meet  with 
the  supervisors  in  the  spring  and  advise  them  of  their  duties  as  to 
the  fire  law,  and  he  continues  to  render  every  supervisor  in  the 
county  his  aid  in  the  work.  The  statute  also  makes  the  wardens  of 
this  department  subject  to  call  during  fires  in  Michigan."  Every 
deputy  in  this  department  could  be  called  into  service  in  case  of 
fire. 

Mr.  Lord :  Do  you  think  it  would  be  an  improvement  if  the  laws  govern- 
ing this  department  were  all  in  one  act? 


177 

Mr.  Hoyt:  It  would  be  better  in  one  way.  If  that  could  be  done,  it 
would  be  easier  for  the  man,  when  he  reads  the  law,  to  understand 
it.  We  have  been  trying  during  the  past  years  to  eliminate  as  many 
as  possible  and  boil  them  down  to  one  subject. 

Mr.  Lord:  Do  you  pay  these  supervisors  anything  at  all  from  this 
department  ? 

Mr.  Hoyt :  They  are  paid  out  of  the  forest  fire  appropriation.  They  are 
paid  $2.50  a  day  and  can't  put  in  more  than  five  days  a  year.  There 
is  another  provision  by  which  they  can  work  ten  days  for  the  purpose 
of  extinguishing  fires.  The  work  of  prevention  is  more  important 
than  that  of  extinguishing. 

Mr.  Lord :  Tell  us  about  your  finances.  What  are  your  licenses ;  what 
fees  do  you  receive,  and  give  us  the  amount  you  have  received,  the 
aggregate  for  the  last  year,  etc.? 

Mr.  Hoyt:  We  have  a  commercial  fishing  fund.  Owners  of  power  boats 
which  measure  less  than  five  gross  tons  pay  $10.00  for  each  boat, 
and  $2.00  a  ton  over  that ;  sail  boats  require  a  license  of  $5.00 ;  nets 
operated  under  the  ice,  or  otherwise,  by  residents  of  the  state,  license 
fee  of  $1.00;  and  the  license  number  must  be  printed  on  the  buoys 
of  nets.  That  is  the  resident  law.  Then  we  have  a  non-resident 
commercial  fishing  law,  which  requires  a  person  to  pay  $50.00  for 
boats  of  less  than  ten  tons  gross  and  $5.00  a  ton  for  all  boats  above 
that,  limiting  the  amount  to  $100.00. 

Then  we  have  the  hunter's  license  law,  which  provides  that  residents 
of  this  state  shall  pay  $1.00  for  hunting  and  trapping,  and  non-resi- 
dents of  the  state  shall  pay  $10.00  for  license  to  hunt  and  trap.  In 
addition  to  that  is  the  deer  hunting  license  law,  which  provides  that 
residents  of  this  state  shall  pay  $1.50  and  non-residents  shall  pay  a 
license  of  $25.00  for  the  purpose  of  hunting  deer  in  this  state. 
Then  we  have  a  system  of  permits  which  are  issued  for  the  purpose 
of  keeping  game  in  captivity  for  scientific  investigations.  This  fee 
has  been  $1.00,  but  hereafter,  under  the  new  law,  it  will  be  $5.00. 
We  have,  as  I  said  some  time  ago,  a  law  which  provides  that  certain 
persons  shall  secure  permits  to  spear  white  fish,  and  the  fee  for  that 
is  $1.00;  to  take  rainbow  trout,  $1.00.  These  funds  are  to  be  used 
for  enforcing  the  law  at  such  time  as  persons  are  operating  on  lakes 
and  streams  for  that  purpose. 

Mr.  Lord:     Who  collects  these  fees? 

Mr.  Hoyt :  Hunting  licenses  are  sold  by  the  County  Clerk,  or  by  depu- 
ties of  this  department,  or  by  any  person  whom  we  appoint  to  sell 
them. 

Mr.  Lord :  What  per  cent  of  the  fee  does  the  County  Clerk  or  the  agents 
you  appoint  get? 

Mr.  Hoyt :     Ten  per  cent. 

Mr.  Lord:     How  often  is  the  balance  of  these  fees  turned  in? 

Mr.  Hoyt:     Every  month. 

Mr.  Lord:  What  system  have  you  to  guard  against  any  grafting  on  the 
part  of  these  men? 

Mr.  Hoyt :     They  are  all  bonded. 

Mr.  Lord:     The  "County  Clerk  also? 

Mr.  Hoyt:  He  operates  under  his  bond  as  County  Clerk,  but  our  law 
gives  us  the  right,  where  we  find  the  County  Clerk  is  not  bonded 

heavy  enough,  to  require  him  to  give  a  bond.    We  have  never  had 


178 

any  trouble,  except  in  Iron  County.  At  one  time  that  county  owed 
us  |3,300.00.  The  Auditor  General  did  the  collecting  and  the  County 
Clerk  remitted  through  the  Treasurer.  Under  the  new  law,  they 
remit  direct  to  us  and  we  to  the  Auditor  General  and  he  to  the 
Treasurer  of  the  State.  In  this  way,  we  know  we  should  get  the 
remittance  on  the  first  of  every  month  and  can  readily  ascertain  why, 
if  it  is  not  here.  Also,  we  have  another  way  to  get  the  money  out 
of  them,  as  it  means  imprisonment  for  them  to  collect  the  funds  and 
retain  them. 

Mr.  Lord:  Have  you  a  system  of  numbering  the  license  stubs  so  that 
you  know  what  they  have  issued? 

Mr.  Hoyt:  They  make  a  report  to  us  every  month  of  the  number  they 
have  sold  and  at  that  time  they  return  the  unused  stubs  and  licenses 
to  us. 

Mr.  Lord:    What  becomes  of  these  funds  when  you  collect  them? 

Mr.  Hoyt :     They  are  all  turned  over  to  the  Auditor  General. 

Mr.  Lord:  What  various  funds  are  they  credited  to  in  the  State 
Treasury  ? 

Mr.  Hoyt:     Game  and  fish  protection  fund. 

Mr.  Lord:     You  only  have  the  two  funds  now? 

Mr.  Hoyt:  I  am  not  sure  because  the  Auditor  General  handles  that. 
It  all  goes  to  the  game  and  fish  protection  fund  under  the  new  law, 
I  believe,  with  exception  of  the  commercial  fishing  fund. 

Mr.  Lord:  Well,  I  have  noticed  in  the  past  that  most  all  legislative  acts 
state  that  the  fees  collected  under  this  act  shall  be  credited  to  such 
and  such  a  fund.  I  find  there  are  seven,  eight  or  nine  different  funds 
to  which  fees  collected  by  this  department  are  credited  to. 

Mr.  Hoyt :     I  think  the  laws  you  refer  to  have  been  repealed. 

Mr.  Lord:  Miss  Frost,  will  you  tell  us  the  amounts  received  by  the 
department  last  year;  the  amount  of  fees  and  the  amount  credited 
to  the  various  funds. 

Miss  Frost: 

Game  protection  fund $187,151.72 

Commercial  fishing  fund 16,751.72 

Special  fire  appropriation  refund  on  freight  bill 28.08 

Obnoxious  fishing  fund 5,214.70 

Spawn  fishing 123.34 

Receipts  to  the  fire  fund 899.75 

Amount  allowed  from  the  general  fund  to  cover  our  dis- 
bursements   • 42,423.38 

Mr.  Lord:  What  was  the  aggregate  amount  of  the  receipts  independent 
of  the  general  fund? 

Miss  Frost:     $229,269.48. 

Mr.  Lord :  Can  you  tell  us  what  balance  you  have  to  the  credit  of  each 
of  those  funds  in  the  State  Treasury? 

Miss  Frost :     Balance  credited  to  each  fund  December  1st : 

Game  protection  fund $187,727.39 

Commercial  fishing  fund 3,102.25 

Special  fire  fund  18,807.07 

Spawn  fishing  fund 155.69 

Obnoxious  fishing  fund 3,436.91 


Aggregate  balance $213,231.31 


179 

Mr.  Lord:     Is  that  about  the  average  balance  you  have  during  the  year? 

Miss  Frost:     That  is  high. 

Mr.  Lord :  What  would  you  say  would  be  the  average  aggregate  balance 
for  the  year? 

Miss  Frost:     I  believe  $150,000.00  would  be  a  fair  estimate. 

Mr.  Lord :  You  are  not  permitted  to  transfer  any  of  these  moneys  from 
one  fund  to  the  other? 

Miss  Frost:     No,  sir. 

Mr.  Lord:  What  do  you  do  when  you  have  more  money  in  any  fund 
than  you  can  use  ? 

Mr.  Baird :  Well,  we  would  not  have  $213,000.00  only  we  have  not  been 
buying  so  many  bolts  on  account  of  their  high  price. 

Mr.  Lord:     Have  you  used  all  your  money  every  year? 

Mr.  Baird:     Oh,  no. 

Mr.  Lord:  Can  you  tell  us  what  the  cost  of  the  department  was.  last 
year  by  funds  ? 

Miss  Frost: 

Game  protection $134,252.88 

Commercial  fishing  15,836.44 

Special  fire 18,463.06 

Obnoxious  fishing   6,371.88 

Spawn  fishing 916.58 

General  fund   43,323.13 

Mr.  Lord:  Mr.  Baird,  will  you  tell  us  about  the  fire  protection  propo- 
sition ? 

Mr.  Baird :  Well,  there  never  were  two  offices.  We  have  one  chief  fire 
warden  and  the  statute  provides  that  we  may  have  one  special  assist- 
ant appointed  to  the  Game  Warden.  We  did  not  feel  we  needed  that 
so  the  Public  Domain  Commission  wanted  to  appoint  a  man  to  look 
after  the  fire  interest  alone,  and  they  took  that  office  away  from  this 
department  and  put  it  in  up  in  the  Upper  Peninsula.  They  took 
over  the  Northern  Fire  Protection  Company. 

Mr.  Lord :     Don't  you  have  any  supervision  at  all? 

Mr.  Baird  :  Oh,  yes ;  but  they  wanted  an  office  of  their  own  up  there  and 
they  kept  Mr.  Wyman  at  the  head  of  it. 

Mr.  Hoyt:  They  really  took  the  work  formerly  done  by  one  man  and 
divided  it  between  two  men. 

Mr.  Lord :  Do  you  think  that  one  man  could  do  it  at  less  expense  and 
do  it  as  efficiently  and  effectively  as  two  men  can  do  it? 

Mr.  Baird :     I  think  it  is  better  with  one  man. 

Mr.  Lord:  Did  you  ever  make  a  recommendation  to  the  Public  Domain 
Commission  to  that  effect? 

Mr.  Baird :  I  did  at  the  last  meeting.  At  the  last  meeting  of  the  Public 
Domain  Commission,  effort  was  made  to  create  another  place  to  take 
over  the  Lower  Peninsula  and  have  it  the  same  as  the  Upper 
Peninsula. 

Mr.  Lord :     What  was  the  object  of  creating  that  Upper  Peninsula  office? 

Mr.  Baird:  The  lumbermen  up  there  had  a  fire  fighting  force  of  their 
own  and  wanted  the  state  to  take  it  over. 

Mr.  Lord :  And  the  state  did  take  it  over  as  they  wanted  and,  more 
than  that,  kept  the  head  of  the  department.  What  is  the  monthly 
cost  of  that  department  up  there? 


180 

Miss  Frost: 

Postage   ?  10.00 

Clerk 100.00 

Mr.  Wyinan   160.00 

Office  rent 30.00 

Lights 1.00 

Telephone 0.00 

Telegraph   

Office  supplies  5.00 

—1317.50  per  month. 

Mr.  Lord :     Will  you  give  us  the  figures  for  the  Lower  Peninsula  in  the 

same  way? 
Miss  Frost: 

Mr.  Pierson's  clerk *  75.00  (from  first  of  April 

to  first  of  November). 

Rent 5.00 

Postage   10.00 

Telephone   5.00 

Mr.  Lord:  Now,  then,  Mr.  Baird  or  Mr.  Hoyt,  is  there  any  way  that 
you  can  increase  the  efficiency  of  your  department?  Do  you  know 
of  anything  you  can  do,  or  anything  you  need,  that  will  increase  the 
efficiency  of  the  department? 

Mr.  .Baird:  I  think  I  do.  I  don't  think  anything  has  been  done  in 
Michigan  to  look  after  the  inland  fishing  in  the  state,  or  allowing 
thie  people  to  take  the  fish  that  are  there.  I  feel  sure  now  that  there 
are  thousands  of  pounds  of  white  fish  that  have  died  of  old  age  in  the 
inland  waters  of  the  state.  There  was  no  way  to  get  them  out  under 
the  law;  it  is  against  the  law  to  get  them  by  spearing  or  netting 
them,  and  the  only  other  way  is  by  hook  and  line. 

Mr.  Lord:     Has  there  ever  been  any  effort  to  repeal  the  law? 

Mr.  Baird :     I  don't  know. 

Mr.  Lord :  Your  idea  is,  then,  to  open  these  lakes  to  the  public  for  the 
purpose  of  fishing? 

Mr.  Baird:     Yes,  to  keep  the  fish  in  the  state. 

Mr.  Lord:  Do  you  intend  to  make  such  a  recommendation  to  the  legis- 
lature. 

Mr.  Baird:     Yes   sir. 

Mr.  Thompson  :  Should  there  be  a  law  restricting  the  shipping  of  Great 
Lakes  fish  out  of  the  state? 

Mr.  Baird :  I  don't  think  so.  I  think  the  California  plan  is  a  good  one ; 
they  have  a  Market  Director  in  connection  with  the  Fish  and  Game 
Department.  He  has  power  to  compel  them  to  sell  so  much  of  their 
product.  In  Canada,  if  a  man  has  any  amount  of  fish,  even  though 
they  be  packed,  he  has  to  open  the  box  at  any  time  and  sell  the  fish 
for  "six  cents  per  pound  right  along,  and  we  pay  fifteen  or  sixteen 
cents  over  here  for  the  same  kind  of  fish. 

Mr.  Lord:  There  is  no  reason  why  they  should  get  fish  in  Canada  for 
six  cents  and  we  pay  fifteen  or  sixteen  cents. 

Mr.  Lord:  I  suppose  one  of  the  reasons  why  your  activities  are  so 
much  more  varied  is  because  of  the  fact  that  we  have  more  game  and 
more  fish. 


181 

Mr.  Hoyt :     Yes,  we  have  more  fish,  that  is  the  reason. 

Mr.  Lord:     What  property  does  the  department  own? 

Mr.  Hoyt :     We  have  ten  motor  boats  running  in  value  from  $300.00  to 

15,000.00. 

Mr.  Thompson  :     What  are  they  worth  as  a  whole? 
Mr.  Hoyt :     It  is  hard  to  set  a  price  on  motor  boats  after  they  have  been 

put  into  the  water.     I  don't  think  they  are  worth  $10,000.00.     I 

would  have  asked  the  commission  this  fall  to  buy  another  boat,  but 

it  isn't  the  right  time  to  be  buying. 

Mr.  Thompson :     What  is  the  property  worth  down  near  Mason.? 
Mr.  Hoyt :     We  paid  f  16,500.00  for  it. 
Mr.  Thompson :     Have  you  an  inventory  ? 
Mr.  Hoyt :     Yes,  sir.     The  place  is  worth  f 25,000.00. 
Mr.  Baird :     I  believe  it  is  worth  $30,000.00. 

Mr.  Hoyt :     I  was  going  to  say  the  equipment  is  worth  $10,000.00  more. 
Mr.  Thompson:     How  many  acres  have  you? 
Mr.  Baird:     One  hundred  and  ninety-six.     There  are  about  four  acres 

in  one  corner  that  we  really  ought  to  get. 


STATE  LIBRARY 

Mr.  Lord:     Are  you  the  State  Librarian,  Mrs.  Spencer? 

Mrs.  Spencer :     I  am. 

Mr.  Lord:  And  have  charge  of  all  the  books,  documents,  etc.,  in  the 
State  Library  ? 

Mrs.  Spencer :     Yes  sir. 

Mr.  Lord:  Will  you  state,  in  a  general  way,  what  you  have  accom- 
plished since  becoming  librarian,  and  what  you  propose  to  accom- 
plish in  the  future? 

Mrs.  Spencer :  When  I  became  State  Librarian,  the  library  had  glass 
doors;  every  case  was  put  up  in  this  way  and  the  books  were  only 
for  the  use  of  employes  of  the  state  and  members  of  the  legislature. 
As  it  is  now,  there  is  no  individual  in  the  state,  by  carrying  out 
very  simple  rules,  that  cannot  get  books  from  the  State  Library; 
everything  except  reference  books  and  books  in  the  law  library.  We 
have  never,  in  five  years,  had  to  refuse  anyone  a  book  because  they 
couldn't  get  proper  endorsement. 

Mr.  Lord:     When  did  you  become  State  Librarian? 

Mrs.  Spencer :  Twenty-five  years  ago ;  that  was  when  I  was  made 
librarian,  1892. 

Mr.  Lord:     How  many  volumes  did  you  have  at  that  time? 

Mrs.  Spencer :     Sixty-three  thousand. 

Mr.  Lord  :     How  many  have  you  today? 

Mrs.  Spencer :     About  300,000. 

Mr.  Lord :  What  was  the  cost  of  the  State  Library  the  first  year  you 
became  librarian  and  what  was  the  cost  the  last  fiscal  year? 

Mrs.  Spencer :  Well,  when  I  became  State  Librarian,  there  were  no  trav- 
eling libraries  and  I  can't  just  tell  what  the  cost  was  then. 

Mr.  Lord :     Well,  what  was  the  cost  last  year,  or  for  the  last  ten  years? 

Mrs.  Spencer :  For  the  last  ten  years,  I  have  had  a  f  5,000.00  appropria- 
tion each  year  for  the  State  Library  and  |5,000.00  for  the  traveling 
library. 


182 

Mr.  Lord:     For  what  purpose  was  the  $5,000.00  spent? 

Mrs.  Spencer :     Purchase  of  books. 

Mr.  Lord:     What  I  want  to  know  is  the  aggregate  cost  of  the  library, 

including  salaries,  expenses,  etc. 

Mrs.  Spencer :     Well,  the  cost  of  the  library  has  been  $5,000.00,  in  addi- 
tion to  salaries. 

Mr.  Lord:     Does  that  include  expenses  of  shipping  and  postage? 
Mrs.  Spencer:     No,  postage  conies  out  of  the  general  fund. 
Mr.  Lord:     You  don't  know  what  amount  you  draw  from  the  general 

fund? 
Mrs.  Spencer :     For  salaries,  printing  and  binding,  stationery  and  blanks. 

The  appropriation  is  used  for  the  purchase  of  books  only. 
Mr.  Lord :     Are  other  expenses  paid  from  the  general  fund  ? 
Mrs.  Spencer :     Yes. 
Mr.  Lord :     Do  you  keep  any  account  at  all  showing  the  exact  amount 

drawn  from  the  general  fund? 
Mrs.  Spencer :     Oh,  yes.     Vouchers  show  that.     We  have  a  copy  of  all 

our  vouchers. 
Mr.  Lord:     Do  you  have  a  book  account  of  those;  are  they  entered  in 

any  book  ? 

Mrs.  Spencer :     We  can  tell  by  looking  at  the  vouchers. 
Mr.  Lord :     But  you  would  have  to  check  through  all  the  vouchers  ? 
Mrs.  Spencer :     Yes. 
Mr.  Lord  :     Don't  you  think  it  would  be  a  good  idea  for  the  State  Library 

to  keep  a  book  in  which  the  aggregate  amount  of  vouchers  be  shown? 
Mrs.  Spencer :     Yes,  we  could  do  that  by  copying  it  every  month ;  that 

used  to  be  done  but  late  years  we  have  not;  we  used  to  keep  track 

of  the  cost  of  all  books,  but  now  each  book  has  the  price  marked 

in  it. 
Mr.  Lord:     The  question  we  asked  you  was,  what  the  aggregate  cost  of 

the  library  was  for  the  last  year. 
Mrs.  Spencer :     Well,   for  instance,   by   referring  to   the   vouchers,   the 

last  voucher  shows  the  exact  amount  of  money  I  have  left  out  of  the 

appropriation. 
Mr.  Lord :     I  am  asking  for  cost,  including  the  amount  drawn  from  the 

general  fund. 
Mrs.  Spencer:     I  can't  tell.     I  didn't  know  that  any  department  did  that. 

If  you  should  ask  me  what  money  I  have  now,  as  a  balance,  I  could 

tell  it,— 182.00. 
Mr.  Lord:     You  could  tell  the  balance  of  your  appropriation,  but  you 

couldn't  tell  how  much  you  had  drawn  from  the  general  fund? 
Mrs.  Spencer:     No.     I  understand  now ;  you  mean  everything  the  library 

costs. 
Mr.  Lord:     Yes;  what  the  State  Library  is  costing  the  taxpayers  every 

year. 

What  we  would  like  to  know  is,  just  what  the  increase  in  cost  has 

been  since  you  became  State  Librarian,  and  how  that  balances  up 

with  the  increase  in  volume  of  business  done  by  this  department. 

Have  you  any  idea,  approximately,  as  to  what  the  library  cost  last 

year? 
Mrs.  Spencer :     I  could  give  you  that  for  one  year,  for  the  fiscal  year 


183 

ending  1916.     I  don't  think  it  would  be  as  much  this  year  as  last 
because  we  have  not  done  so  much  state  binding. 

Postage I   459.00 

Binding 1,860.40  ; 

Printing 2,083.01 

Stationery 442.24 

$4,844.65 

Mr.  Lord:  Have  you  got  everything  that  you  need  by  way  of  equip- 
ment, etc.,  in  the  library? 

Mrs.  Spencer :     You  mean  the  library  itself  ? 

Mr.  Lord :     I  mean  everything  in  connection  with  the  library. 

Mrs.  Spencer :  Well,  I  couldn't  say  that  I  had  everything  that  I  would 
like.  For  instance,  my  office  here ;  but  it  don't  make  much  difference 
to  me  where  I  am. 

Mr.  Lord :  Do  you  send  out  very  many  documents  or  letters ;  is  your 
mailing  list  large? 

Mrs.  Spencer :  My  mailing  list  for  one  month  is  about  four  or  five 
hundred  letters. 

Mr.  Lord :     Do  the  letters  go  to  the  same  ones  every  month  ? 

Mrs.  Spencer :  Oh,  no.  We  have  a  list  of  nearly  two  hundred  libraries 
connected  with  us  and  we  send  everything  to  them. 

Mr.  Lord :     Does  that  constitute  your  mailing  list  ? 

Mrs.  Spencer :     I  have  a  mailing  list  of  all  the  states  in  the  Union. 

Mr.  Lord:  Do  you  send  out  any  state  publications  from  the  various 
departments  ? 

Mrs.  Spencer :  All  that  the  Secretary  of  State's  office  does  not  attend  to, 
we  do.  There  were  243,000  books  passed  through,  received  and  sent 
out,  in  my  shipping  room  in  two  years.  We  send  to  every  state  in 
the  Union,  South  America,  Philippine  Islands,  and  to  England. 

Mr.  Lord:     The  same  mailing  list  all  the  time? 

Mrs.  Spencer :  Just  within  the  last  three  months  I  have  sent  a  list  to 
every  one  of  our  exchanges  and  asked  them  to  cut  out  the  documents 
that  they  do  not  want,  and  I  have  notified  the  Secretary  of  State 
that  instead  of  200  copies  of  publications,  I  would  get  along  with 
125;  we  are  revising  our  mailing  list  and  every  one  shows  what  they 
want. 

Mr.  Lord:  Can  you  tell  us  about  the  number  of  persons  and  institu- 
tions on  each  of  your  mailing  lists  that  you  have? 

Mrs.  Spencer :  We  mail  to  state  libraries.  That  mailing  list  is  now  in 
the  shipping  room  and  you  can  find  out  there. 

Mr.  Lord:  Now,  then,  Mrs.  Spencer,  you  address  all  these  wrappers 
and  envelopes  in  what  way  ? 

Mrs.  Spencer :     We  typewrite  them. 

Mr.  Lord:     It  amounts  to  a  great  many  thousands  during  the  year? 

Mrs.  Spencer :  Well,  I  couldn't  tell  you  just  how  many  there  are  and  I 
wouldn't  want  to  say  that  there  were  many  thousands. 

Mr.  Lord:     Do  you  send  any  documents  to  the  public  schools? 

Mrs.  Spencer :  That  is  done  by  the  Secretary  of  State.  We  send  our  bul- 
letins to  all  superintendents  of  schools. 

Mr.  Lord :  Mrs.  Spencer,  can  you  tell  us  how  many  lists  of  names  you 
have  that  you  send  publications  to? 


184 

Mrs.  Spencer:  Well,  we  have  two  lists:  this  one  (shown)  and  those 
outside  of  the  state. 

Mr.  Lord:     How  abont  school  mailing  lists? 

Mrs.  Spencer:     They  are  sent  to  every  school  that  has  a  library. 

Mr.  Lord:     What  we  want  to  know  is,  if  there  is  a  sufficient  volume  of 
-    mailing  done  to  warrant  an  addressing  machine. 

Mrs.  Spencer :  I  have  been  offered  the  use  of  that  one  in  the  Public 
Instruction  Department,  just  as  they  use  our  mimeograph. 

Mr.  Lord:  The  mimeograph  that  you  speak  of,  is  that  of  considerable 
aid  to  you?  Do  you  send  out  quite  a  large  number  of  form  letters? 

Mrs.  Spencer:  No;  I  couldn't  do  that,  except  in  sending  out  blanks  to 
be  returned.  When  I  send  out  these  letters  I  make  one  original  letter 
and  the  rest  I  make  on  the  mimeograph.  The  mimeograph  is  used 
more  up  in  the  legislative  reference  bureau. 

Mr.  Lord:  Have  you  any  more  help  in  the  library  than  yon  actually 
need?  Do  you  think  yon  need  all  the  people  that  you  have? 

Mrs.  Spencer:  Yes.  I  get  along  with  our  regular  force.  Occasionally  I 
get  temporary  help  for  a  month  or  so,  and  when  they  get  through 
they  go. 

Mr.  Lord:  Who  makes  the  appointments  of  the  working  force  in  the 
library  ? 

Mrs.  Spencer:  I  appoint  them  with  the  consent  of  the  Governor.  I  sub 
mit  the  names  to  the  Governor. 

Mr.  Lord:  Under  the  law,  does  the  Governor  have  to  approve  the 
appointment  of  your  employes  ? 

Mrs.  Spencer:     Yes,  they  are  appointed  with  his  advice  and  consent. 

Mr.  Lord:  Getting  back  to  the  increase  in  the  number  of  volumes  in 
your  library;  that  is  a  very  large  increase.  Has  there  been  a  corre- 
sponding increase  in  the  number  of  your  employes  to  handle  this 
business  ? 

Mrs.  Spencer:  When  the  library  was  closed  up,  when  it  was  a  closed 
department,  as  I  told  you,  I  think  there  were  about  seven  people. 
There  was  a  time  when  we  only  kept  it  open,  the  law  library,  for 
instance,  during  the  day,  but  now  it  is  open  from  9  o'clock  hi  the 
morning  until  9  at  night. 

Mr.  Lord:     Does  keeping  it  open  necessitate  additional  help? 

Mrs.  Spencer :  We  always  had  one  law  clerk ;  we  keep  it  open  now  until 
9  at  night  and  I  have  a  man  who  has  been  here  a  number  of  years, 
who  came  in  as  a  janitor,  who  is  thoroughly  familiar  with  the  law 
department,  and  he  stays  nights  and  gets  f 25.00  a  month  for  it.  I  do 
this  instead  of  having  an  extra  clerk. 

I  was  going  to  say  that  we  had  six  employes  thirty  years  ago.  Since 
that  time,  the  library  has  been  opened  up  until  it  covers  the  whole 
state.  I  think  that  the  average  pay  roll  during  the  year  shows  about 
19  people. 

Mr.  Lord :  Now,  Mrs.  Spencer,  you  think  that  all  the  activities  in  which 
the  library  is  engaged  are  necessary? 

Mrs.  Spencer:  I  certainly  do,  and  may  I  say  that  I  have  had  no  vaca- 
tion for  ten  years.  I  spend  my  time  here,  every  minute,  and  I  am 
doing  the  work  of  at  least  two  people.  I  do  it  because  I  am  perfectly 
willing  to  do  it  and  because  I  have  a  certain  standard  that  I  want 
to  keep  this  library  up  to.  This  library  stands  at  the  head  of  all 


185 

state  libraries  in  the  United  States,  and  it  has  been  a  matter  of 
pride  with  me  to  keep  it  up  to  the  very  highest  standard.  I  have 
good  help,  but  I  know  that  if  you  want  a  thing  done  just  as  you  want 
it,  you  have  to  do  it  yourself. 

Mr.  Lord :     You  have  active  supervision  of  all  the  employes  ? 

Mrs.  Spencer :  Absolutely ;  I  am  the  one  that  is  held  responsible  for 
everything  that  goes  wrong. 

Mr.  Lord :     What  salary  do  you  get  ? 

Mrs.  Spencer :  f  1,800  a  year.  I  worked  here  ten  years  for  $700.00  a  year ; 
then  I  got  f  800.00;  then  to  f  1,200,  and  now  I  am  getting  $1,800.00. 

Mr.  Lord:     Do  you  draw  any  other  salary? 

Mrs.  Spencer :  Yes,  I  am  Secretary  of  the  State  Board  of  Library  Com- 
missioners and  draw  $800.00  a  year  for  that  work;  making  my  total 
salary  $2,600.00.  That  is  one  reason  that  I  give  all  my  time  to  this 
work. 

Mr.  Lord :     How  long  have  you  been  getting  this  extra  $800.00  ? 

Mrs.  Spencer :  Only  for  the  last  three  or  four  years ;  at  first  they  paid 
me  $25.00  a  month.  I  want  to  say  that  we  are  working  in  this  state 
for  50%  of  the  expense  it  is  costing  other  states,  for  the  reason  that 
I  have  charge  of  this  commission  work.  We  have  three  people  in  the 
field,  and  everything  has  to  be  directed  from  this  desk.  Every  part 
of  the  stenographic  work  and  shipping  work  is -done  here. 

Mr.  Lord :  Would  you  need  all  the  clerical  help  you  have  if  you  were  not 
connected  with  this  board? 

Mrs.  Spencer:  Yes,  it  is  this  way.  For  instance,  you  take  stenographers, 
I  would  have  to  have  two  stenographers  anyway;  they  do  other 
work.  There  is  not  a  state  in  the  union  where  so  much  work  is  done 
as  I  am  doing,  but  they  all  pay  more  salary. 

Mr.  Lord :     What  position  does  Mrs.  Shier  hold  here  ? 

Mrs.  Spencer:  She  is  Deputy  State  Librarian.  She  gets  $1,500.00  a 
year. 

Mr.  Lord:     Does  she  get  any  salary  from   other  sources? 

Mrs.  Spencer:  Mrs.  Shier  takes  entire  charge  of  the  field  workers.  We 
have  three,  Organizer,  Visitor,  and  County  Normal  Director;  she 
has  charge  of  that  work  and  the  Board  of  Library  Commissioners 
pays  her  $25.00  a  month. 

Mi*  Lord :  Couldn't  that  be  done  by  the  library  itself  without  any  spe- 
cial person  to  look  after  that  branch  of  the  business? 

Mrs.  Spencer :  Well,  we  have  just  about  all  that  we  can  take  care  of 
now. 

Mr.  Lord :     You  think  it  is  absolutely  necessary  and  essential  ? 

Mrs.  Spencer :     The  commissioners  feel  that  way  about  it. 

Mr.  Lord :     How  much  of  Mrs.  Shier's  time  does  that  work  take  ? 

Mrs.  Spencer:  She  does  that  all  after  hours,  after  4  o'clock  entirely.  I 
do  a  great  deal  of  my  work  after  office  hours.  In  most  of  the  states 
they  pay  from  $2,000.00  to  $3,000.00  for  this  commission  work  and 
then  have  a  separate  force. 

Mr.  Lord:  What  are  the  duties  of  the  State  Board  of  Library  Com- 
missioners ? 

Mrs.  Spencer:  To  organize  the  school  libraries  and  the  state  district 
libraries  and  township  libraries;  to  build  up  libraries,  strengthen 
weak  ones  and  organize  new  ones. 


186 

Mr.  Lord :  As  a  matter  of  fact,  you  and  Mrs.  Shier  do  all  the  work,  don't 
you? 

Mrs.  Spencer :     Well,  I  don't  act  without  the  board's  consent. 

Mr.  Lord:  Couldn't  you  do  the  work  without  any  board?  Do  you  think 
the  Board  of  Library  Commissioners  is  essential?  Don't  you  think 
the  State  Librarian  is  the  proper  person  to  have  charge  of  the  work 
they  do? 

Mrs.  Spencer :     If  the  voice  of  the  people  is  the  voice  of  God- 
Mr.  Lord:     You  are  not  answering  my  question. 

Mrs.  Spencer:  I  could  do  it,  but  I  think  that  the  Board  of  Commis- 
sioners coming  in  every  three  or  four  months,  going  over  the  whole 
ground,  criticizing  me  and  the  work,  is  a  very  good  thing.  I  know 
all  the  influential  states  of  the  union  have  them. 

Mr.  Lord:     So  that  you  really  think  it  is  necessary? 

Mrs.  Spencer :  If  we  need  economy,  cut  it  off.  If  not,  and  the  state  can 
afford  it,  I  think  we  ought  to  have  it. 

Mr.  Lord:  You  don't  think  the  standard  of  the  work  would  suffer  if 
that-board  was  abolished? 

Mrs.  Spencer:  I  think  it  might  out  in  the  state.  We  have  fine  men  on 
that  board ;  Mr.  Munson  was  a  member  of  that  board ;  he  is  Deputy 
Superintendent  of  Public  Instruction  and  conducts  the  normal  work 
which  is  a  worthy  work.  Mr.  Pattengill,  no  one  is  better  known  in 
the  state  than  he. 

Mr.  Lord:     Can  you  tell  us  what  that  board  costs  the  state? 

Mrs.  Spencer:  Just  traveling  expenses  only ;  $50.00  a  year  for  the  whole 
thing. 

Mr.  Lord:  So  that  about  all  the  work  the  board  does  is  meeting  here. 
Now,  isn't  it  a  fact  that  when  they  meet  here,  they  take  your  word 
for  everything? 

Mrs.  Spencer:  No,  I  have  been  criticized.  They  have  not  agreed  with 
me  on  some  things,  and  if  they  did  not  come  around  to  my  way  of 
thinking,  I  did  as  they  desired,  and  awaited  results. 

Mr.  Lord:  Who  are  the  employes  of  the  Board  of  Library  Commis- 
sioners, besides  Mrs.  Shier  and  yourself? 

Mrs.  Spencer :     That  is  all. 

Mr.  Lord :  How  about  those  who  are  out  calling  on  the  small  libraries  of 
the  state? 

Mrs.  Spencer:  Miss  Nina  K.  Preston  of  Ionia  works  part  of  the  time 
and  gets  f  600.00  a  year;  Miss  Alley,  f  1,100.00  or  ftl^OO  a  year,  and 
Miss  Pomeroy,  fl,  100.00  a  year. 

Our  library  visitor  is  going  most  of  the  time.  She  visits  the  schools 
and  talks  with  the  teachers  and  explains  how  to  use  books.  She  only 
stays  in  one  place  a  day  or  day  and  a  half,  as  a  general  thing ;  when 
organizers  are  sent,  we  pay  traveling  expenses,  but  they  pay  living 
expenses.  That  takes  from  two  to  three  weeks  to  organize  as  they 
stay  and  give  instructions  to  the  local  librarian. 

Mr.  Lord:  In  looking  over  your  payroll,  we  notice  that  two  of  your 
employes  are  on  twice,  Mr.  Ormsbee,  for  instance? 

Mrs.  Spencer :     He  works  nights,  the  f 25.00  he  gets  is  for  overtime. 


187 

STATE  OIL  INSPECTOK 

Mr.  Lord:     Mr.  Barren,  are  you  the  State  Inspector  of  Oils? 

Mr.  Barron  :     Yes,  sir. 

Mr.  Lord  :     Will  you  state  to  the  Budget  Commission,  the  nature  of  your 

work,  what  you  have  accomplished,  and  what  benefits  are  derived 

by  the  people  of  the  state  from  your  work,  etc.  ? 
Mr.  Barron:     Why,  the  duties  of  the  oil  inspector  are  to  see  that  the 

deputies  inspect  all  the  kerosene  and  illuminating  oil  that  comes 

into  the  State  of  Michigan. 

Mr.  Lord :     You  say  oil  used  for  illuminating  purposes  ? 
Mr.  Barron:     Yes;  any  used  for  manufacture  of  gas  is  not  inspected. 

Several  of  the  deputies  have  at  different  times  been  called  to  inspect 

oil   and   upon   examination   have   found   it   to   be   gasoline.      Had 

there  been  no  inspection  law,  this  gasoline  would  have  been  sold  for 

kerosene  and  a  great  amount  of  damage  would  have  resulted. 
Mr.  Lord :     Then  the  principal  benefit  derived  from  the  work  of  the  Oil 

Inspector's  Department  consists  of  prevention  of  accidents.     Are 

there  any  other  benefits  ? 
Mr.  Barron :     Don't  think  of  any. 
Mr.  Lord :     How  much  oil  did  you  inspect  last  year  ? 
Mr.  Barron:     36,131,000  gallons. 
Mr.  Lord :     How  much  of  that  did  you  reject  as  being  not  up  to  proper 

standard  ? 

Mr.  Barron :     39,000  gallons. 

Mr.  Lord :     Held  by  a  large  number  of  people  or  just  a  few  ? 
Mr.  Barron :     Quite  general.     No  one  company's  oil. 
Mr.  Lord:     Do  you  inspect  the  oil  as  much  as  possible  where  it  is  in 

tanks,  in  car  loads? 
Mr.  Barron  :     All  oils  are  inspected  in  tank  car  lots  before  it  is  unloaded. 

Barrel  shipments  are  inspected  before  removal  from  the  depot. 
Mr.  Lord :     Do  you  go  into  stores  where  they  sell  kerosene  ? 
Mr.  Barron :     Just  to  enforce  the  "red  can"  act  as  to  gasoline. 
Mr.  Lord :     Do  your  deputies  visit  all  grocers  and  stores  selling  gasoline 

for  that  purpose  ? 

Mr.  Barron:     Yes    sir.     They  are  supposed  to  cover  all  grocery  stores. 
Mr.  Lord:     They  don't  actually  inspect  the  oil  in  the  grocery  stores? 
Mr.  Barron:     No;  oil  is  inspected  before  its  removal  from  the  car. 
Mr.  Lord:     What   is   the   amount   of   bond   you   give  to   the    State   of 

Michigan? 

Mr.  Barron :     I  think  the  law  requires  $10,000.00. 
Mr.  Lord :     What  kind  of  a  bond  ? 
Mr.  Barron  :     Surety  bond. 
Mr.  Lord :     Do  your  deputies  give  any  bonds  ? 
Mr.  Barron :     They  give  a  bond  to  me. 
Mr.  Lord:     In  what  amount? 
Mr.  Barron:     $1,000.00  for  each  one. 
Mr.  Lord :     What  is  the  largest  amount  of  their  collections  every  month, 

on  an  average? 
Mr.  Barron:     Last  year  they  ran  up  to,  and  over,  $1,000.00,  some  of 

them.     This  year  they  have  not  exceeded  $800.00. 
Mr.  Lord :     Who  approves  the  bonds  of  the  deputies  ? 


188 

Mr.  Barren :     The  Judge  of  Probate  in  the  county  where  the  deputy  is 

located. 

Mr.  Lord:     Where  is  that  bond  filed? 
Mr.  Barron :     With  the  County  Clerk  in  the  county  where  the  deputy  is 

located. 

Mr.  Lord:     Does  the  County  Clerk  notify  you  when  the  bond  is  filed? 
Mr.  Barron:     Yes,  sir. 

Mr.  Lord:     You  have  those  certificates  on  file  in  your  office? 
Mr.  Barron:     Yes,  sir. 
Mr.  Lord:     How  often  are  the  fees  collected  by  the  deputies  turned  over 

to  you  ? 

Mr.  Barron :     Once  a  month. 
Mr.  Lord  :     What  do  you  do  with  th,em  ? 
Mr.  Barron:     The  first  year  I  was  inspector,  they  were  deposited  with 

local  banks  and  turned  in  at  the  end  of  the  year;  but  I  took  it  up 

with  the  Board  of  Auditors  and  decided  to  make  remittance  every 

quarter,  and  this  year  I  have  been  sending  the  -fees  to  them  monthly. 
Mr.  Lord :     To  whom  have  you  been  sending  the  money  ? 
Mr.  Barron:     The  State  Treasurer. 

Mr.  Lord :     To  whom  do  you  send  reports  of  those  collections  ? 
Mr.  Barron:     To  the  Board  of  Auditors. 
Mr.  Lord:     They  check  up  the  receipts  do  they,  or  do  they  depend  on 

what  the  deputies  and  yourself  say? 
Mr.  Barron :     Every  month  the  deputies  file  their  report  with  the  Board 

of  Auditors  and  one  with  me,  and  every  three  months  I  make  a  quar- 
terly report,  and  every  year  a  yearly  report;  and  it  is  all  checked 

over  by  the  Board  of  Auditors. 
Mr.  Lord:     Do  you  send  copies  of  that  report  to  anybody  else  besides 

the  Board  of  Auditors? 

Mr.  Barron:     Of  my  yearly  report,  do  you  mean? 
Mr.  Lord:     Yes,  either  report. 
Mr.  Barron:     A  copy  of  my  annual  report  is  sent  to  the  Governor  and 

a  copy  to  the  State  Board  of  Health. 
Mr.  Lord:     What  salaries  do  you  pay  your  deputies? 
Mr.  Barron :     The  salary  is  based  on  the  amount  of  fees. 
Mr.  Lord  :     Isn't  there  a  maximum  ? 
Mr.  Barron:     $75.00  for  inspection  of  oil  and  an  additional  $12.00  a 

month  for  enforcing  the  "red  can"  act. 
Mr.  Lord:     WTas  that  $12.00  a  month  provided  for  in  the  act  covering 

the  inspection  of  red  cans? 
Mr.  Barron:     They  are  paid  $3.00  per  day,  but  they  can't  receive  pay 

for  more  than  four  days  in  one  month. 

Mr.  Lord :     Are  you  personally  paid  anything  at  all  for  that  work? 
Mr.  Barron:     Yes  sir. 
Mr.  Lord :     How  much  ? 
Mr.  Barron:     $3.00  a  day. 
Mr.  Lord:     Are  there  any  limitations  to  the  number  of  days  you  may 

work? 

Mr.  Barron:     No  sir. 

Mr.  Lord :     How  much  did  you  receive  last  year  for  that  kind  of  work? 
Mr.  Barron:     $912.00. 
Mr.  Lord:     What  was  your  salary  as  State  Inspector  of  Oils? 


189 

Mr.  Barren:    f  1,500.00. 

Mr.  Lord :     Making  you  a  total  salary  of  $2,412.00  for  last  year  ? 
Mr.  Barron:     Yes  sir. 
1  Mr.  Lord :     AVhat  is  your  per  diem,  $3.00  per  day  the  same  as  deputies, 

or  more  ? 

Mr.  Barron :     $3.00  per  day. 

Mr.  Lord :     For  what  purpose  do  you  use  a  "Press  Clipping  Bureau"  ? 
Mr.  Barron:     To  inform  me  of  the  accidents  that  occur  from  use  of  the 

wrong  oil. 
Mr.  Lord :     Is  that  your  basis  of  record  of  accidents  caused  by  defective 

oil?    You  get  it  through  the  press? 
Mr.  Barron  :     Yes,  and  the  deputies  report  to  me  also. 
Mr.  Lord:     You  really  think  that  all  this  work  that  you  are  doing  is  a 

good  thing  for  the  people  of  the  state? 
Mr.  Barron:     I  really  do. 

Mr.  Lord:     Do  you  know  of  any  place  where  the  expense  of  the  Oil 
Inspector's  Department  could  be  cut  down  without  impairing  the 
efficiency  of  the  work? 
Mr.  Barron:     No,  I  do  not. 
Mr.  Lord:     Don't  you  think  the  State  Oil  Inspector  could  do  all  of  this 

work  very  nicely,  on  OIK»  salary,  without  getting  two? 
Mr.  Barron :     No,  I  don't,  where  a  department  turns  in  the  amount  of 

money  to  the  treasury  that  we  turn  in. 

Mr.  Lord :     That's  no  reason  for  extravagance.     If  the  work  could  be 
done  with  one  salary  it  should  be  done  with  the  one  salary.     Do  you 
think  the  work  of  the  State  Oil  Inspector  is  worth  $2,400  a  year? 
Mr.  Barron  f     I  do. 

Mr.  Lord:     In  looking  over  the  table  of  salaries  paid,  I  notice  that  a 
number  of  your  deputies  receive  more  than  $75.00  a  month,  in  the 
aggregate  for  the  year  ? 
Mr.  Barron:     None  of  them  get  over  $84.00.     That's  the  combination  of 

the  two  salaries. 
Mr.  Lord:     Do  you  think  that  is  good  business,  having  two  salaries  paid 

under  two  separate  acts? 
Mr.  Barron:     Well,  yes  I  do,  in  a  way,  because  they  might  neglect  the 

"red  can"  law  if  they  were  not  to  receive  pay  for  it. 
Mr.  Lord :     You  would  not  keep  them  long  if  they  neglected  their  work, 

would  you? 

Mr.  Barron :     No,  that's  true. 

Mr.  Lord :     As  oil  inspector,  are  you  supposed  to  visit  the  deputies? 
Mr.  Barron:     Yes,  once  a  year. 
Mr.  Lord  :     How  many  deputies  have  you  ? 
Mr.  Barron :     Twenty-six. 
Mr.  Lord:     That  is  the  maximum  number  you  can  have.     Do  you  know 

why  that  maximum  was  placed  in  the  act? 
Mr.  Barron :     I  do  not. 

Mr.  Lord :  Under  the  law,  you  have  authority  to  spend  all  the  money 
you  collect  and  call  on  the  State  Treasurer  for  more  if  you,  need 
more,  don't  you? 

Mr.  Barron:  That's  the  way  it  was  framed. 
Mr.  Lord :  Do  you  think  that  is  a  good  law  ? 
Mr.  Barron :  No,  I  don't. 


190 

Mr.  Lord:  Bo  you  buy  your  own  office  supplies  and  rent  your  own 
office? 

Mr.  Barron :  Some  of  the  supplies  I  buy,  but  furniture  is  bought  on 
requisition  through  the  Board  of  Auditors.  If  I  should  buy  a  type- 
writer, adding  machine  or  anything  like  that,  I  would  buy  through 
the  Board  of  Auditors. 

Mr.  Lord :  What  change  would  you  make  in  the  law  to  limit  the  author- 
ity of  the  Oil  Inspector  in  the  matter  of  spending  money? 

Mr.  Barron :  I  am  not  an  attorney,  and  don't  know  as  I  could  suggest 
the  kind  of  law  that  should  be  drawn. 

Mr.  Lord :  Would  you  change  the  law  and  require  all  the  bills  to  go  to 
the  Board  of  Auditors  before  they  are  paid? 

Mr.  Barron:  Yes,  I  think  that  would  be  a  good  thing.  There  might 
be  an  inspector  that  would  take  advantage  of  it. 

Mr.  Lord:  In  regard  to  your  deputies'  traveling  expenses;  what  do 
you  require  them  to  do  by  way  of  sending  in  vouchers  calling  for  pay- 
ment of  expenses  incurred? 

Mr.  Barron:  Every  deputy  collects  all  the  fees  for  inspection  of  oil  in 
his  district  and  deducts  his  salary  and  expenses. 

Mr.  Lord :     What  sort  of  a  statement  does  he  furnish  you  ? 

Mr.  Barron :     A  monthly  report. 

Mr.  O'Brien:  How  do  you  know  how  many  gallons  a  deputy  has 
inspected  ? 

Mr.  Barron:     He  files  with  his  report  a  certificate  showing  it. 

Mr.  O'Brien:  What  evidence  have  you  that  it  is  a  correct  record;  that 
all  the  oil  in  any  particular  district  has  been  inspected? 

Mr.  Barron:  The  depot  agent  calls  the  deputy  up  as  soon  as  the  car 
arrives  at  the  station. 

Mr.  O'Brien:  How  do  you  know  but  that  there  might  be  two  cars  and 
not  just  one? 

Mr.  Barron :     If  there  were  two  cars  the  deputy  would  inspect  them. 

Mr.  Lord:  Supposing  your  deputies  did  not  report  a  certain  car 
inspected  ? 

Mr.  Barron :  I  would  not  have  any  check  with  some  companies  and  with 
some  I  would.  Some  of  the  companies  would  notify  me  that  car 
number  so  and  so  had  not  been  inspected. 

Mr.  Thompson:  Suppose  that  there  were  two  cars  at  a  certain  point 
and  your  deputy  went  and  inspected  both  cars  and  only  reported 
one  to  you,  and  that  he  pocketed  the  fees  of  that  other  car,  what; 
check  would  you  have  on  that  operation? 

Mr.  Barron :     Don't  know  as  we  would  have  any. 

Mr.  Lord:     The  door  is  left  wide  open  in  a  case  like  that. 

Mr.  Thompson :  You  report  a  certain  number  of  gallons  in  the  report  I 
am  looking  at,  6,498  gallons.  How  do  you  know  that  there  were  that 
many  gallons? 

Mr.  Barron :  The  West  Trunk  Line  prints  a  book  giving  a  table  as  to 
capacity  of  cars  and  I  go  by  that. 

Mr.  Thompson :  Then  your  only  possible  error  would  be  that  the 
inspector  would  not  report  certain  inspections  and  keep  the  money. 
Would  it  not  be  Jair  to  you  that  he  would  get  the  signature  of  some- 
body in  charge  of  that  oil  that  he  inspected?  When  he  collects  feea 
what  kind  of  a  receipt  does  he  give? 


191 

Mr.  Barren:     Don't  think  he  gives  any  receipt  at  all. 
Mr.  Thompson :     No  receipt  given  for  fees  ? 

.  Barron:     I  don't  believe  so.     Inspection  fees  are  paid  by  oil  com- 
panies at  the  end  of  each  month  to  the  deputy  who  inspects  the  oil. 
Mr.  Thompson:     Your  monthly  report  is  the  only  record  of  the  matter 

that  you  have? 
Mr.  Barron:     Yes    sir. 
Mir.  Thompson :     How  would  you  know  that  the  inspector  reported  all 

his  inspections? 
|Mr.  Barron :     Well,  if  the  deputy  was  dishonest,  I  would  have  no  way  of 

knowing. 
•Mr.  Thompson :     Are  you  sure  that  you  make  all  collections  from  the 

companies  ? 
Mr.  Barron:     I  hold  the  deputies  responsible  for  payment  to  the  state. 

The  deputy  is  held  for  every  inspection  he  makes. 
iMr.  Lord:     Getting  back  to  the  bond.     Does  the  deputy  give  a  surety 

bond? 

IMr.  Barron :     Some  do,  and  some  give  personal  bonds. 
[Mr.  Lord :     Have  you  ever  caught  any  of  your  deputies  stealing  ? 
IMr.  Barron :     No  sir,  I  never  have. 

I  Mr.  Lord:     Who  makes  the  appointments  of  deputies? 
[Mr.  Barron:     I  do. 
I  Mr.  Lord:     Do  you  make  them  on  your  own  initiative,  or  at  the  request 

of  the  Governor? 
Mr.  Barron:     Both  ways.     Since  Governor  Sleeper  has  taken  office,  I 

have  consulted  him  on  all  appointments. 
Mr.  Lord:     Who  appointed  you? 
,Mr.  Barron:     Governor  Ferris. 
Mr.  Lord:     A  large  number  of  your  appointments  are  made  on  the 

request  of  the  Governor,  are  they? 
i  Mr.  Barron :     I  would  say  so,  yes. 
Mr.  Lord:     How  long  have  you  been  Oil  Inspector? 
iMr.  Barron:     Since  September  1st,  1914. 
I  Mr.  Lord :     How  many  of  your  deputies  have  you  appointed  on  your  own 

initiative  since  that  time? 
Mr.  Barron:     Just  one,  I  believe. 
Mr.  Lord:     How  many  have  been  appointed  altogether  since  you  have 

been  inspector? 
Mr.  Barron:     In  the  neighborhood  of  thirty.     Some  resigned  and  some 

died. 
Mr.  Lord:     So  that  as  a  matter  of  fact,  all  the  appointments  made  in 

your  department  are  made  at  the  request  of  somebody  else. 
Mr.  Barron :     The  local  committee  is  always  consulted. 
Mr.  Lord:     Political  committee? 
Mr.  Barron :     Yes. 
Mr.  Lord :     They  are  appointed  because  of  political  influences  rather 

than  for  their  ability  to  perform  their  duties? 

Mr.  Barron:     Yes,  but  if  they  would  not  or  could  not  perform  their 
duties,  I  would  not  keep  them.    I  have  discharged  two  since  being 
inspector. 
Mr.  Lord :     When  were  they  discharged  ? 


192 

Mr.  Barren :  I  can't  give  you  the  exact  dates.  One  in  1916  and  one  in 
1917. 

Mr.  Lord:     Were  they  your  own  appointees? 

Mr.  Barron:     Yes  sir. 

Mr.  Lord :  No  appointments  are  made  unless  the  applicant  gets  the 
endorsement  of  the  local  political  committee  ? 

Mr.  Barron :     Or  o.  k.'d  by  the  Governor. 

Mr.  Lord:     Do  you  think  that  is  a  good  system,  Mr.  Barron? 

Mr.  Barrou :     Well,  you  have  to  leave  it  to  somebody. 

Mr.  Lord:  You  think  the  local  political  committee  is  the  proper  party 
to  make  recommendation  for  appointments  to  the  public  service? 
You  think  that  is  much  better  than  recommendations  from  respon- 
sible business  interests,  such  as  banks  or  large  manufacturers,  do 
you? 

Mr.  Barron :  Why,  yes  in  a  way,  I  do.  Because  you  can  get  quicker 
action. 

Mr.  Lord:     Why  do  you  have  to  get  quick  action? 

Mr.  Barron:  In  case  a  deputy  died  and  I  had  to  wait  to  refer  to  banks, 
it  would  take  a  week  or  so  before  T  could  fill  the  vacancy. 

Mr.  Lord:  You  hurry  the  matter  and  in  order  to  do  so,  you  take  the 
matter  up  with  the  local  political  committee  and  they  send  a  man 
right  along,  is  that  it? 

Mr.  Barron:     Yes   sir. 

Mr.  Lord:  You  were  appointed  under  a  democratic  Governor  and,  when 
you  wanted  to  make  a  new  appointment,  you  took  it  up  with  the  Gov- 
ernor and  he  probably  got  into  communication  with  the  local  demo- 
cratic committee  in  the  district  where  the  appointment  was  to  be 
made,  and  upon  recommendation  of  that  committee,  appointment 
was  made.  Is  that  the  course  that  has  been  followed? 

Mr.  Barron:  Practically.  Not  only  with  Governor  Ferris,  but  with 
Governor  Sleeper,  also. 

Mr.  Thompson:     What  is  this  test  that  yon  make,  Mr.  Barron? 

Mr.  Barron :     What  is  called  a  "flash"  test. 

Hr.  Thompson:     Tell  us  about  it  briefly. 

Mr.  Barron :  The  oil  when  heated  must  flash  at  a  point  on  the  ther- 
mometer not  lower  than  120  degrees  Fahrenheit. 

Mr.  Thompson :  How  long  does  it  take  you  to  train  a  man  to  make  that 
test? 

Mr.  Barron :     A  very  short  time. 

Mr.  Thompson:     How  long? 

Mr.  Barron:     Oh,  a  couple  of  tests  will  generally  train  him. 

Mr.  Thompson:    When  do  they  make  rejections? 

Mr.  Barron:     When  it  falls  below  120  degrees. 

Mr.  Thompson:     What  does  that  indicate? 

Mr.  Barron:  It  indicates  that  there  is  gasoline  or  some  other  mix-up 
with  the  oil. 

Mr.  Thompson:     Why  would  the  companies  put  gasoline  in  kerosene? 

Mr.  Barron:     Through  a  mistake  at  the  refinery  or  something  like  that. 

Mr.  Thompson :  I  notice  that  in  some  cases  you  have  a  lot  of  rejections 
in  certain  districts,  and  in  others  you  have  none. 

Mr.  Barron:     Just  happened  that  way. 

Mr.  Thompson:  .  Can  you  trace  that  out  from  any  source  or  cause?    It 


193 

seems  inconceivable  that  an  oil  company  would  sell  gasoline  for 
kerosene  when  gasoline  would  sell  for  twice  as  much. 

Vlr.  Barron  :     It  is  the  result  of  a  mistake. 

Mr.  Thompson:     Are  all  these  matters  results  of  mistakes ? 

Mr.  Barron :     Yes  sir. 

Mr.  Thompson:  What  is  the  cost  per  gallon  to  the  company  for  the 
inspection  ? 

Mr.  Barron:     One-fifth  of  a  cent. 

!lMr.  Thompson:  Do  you  figure  that  this  is  added  to  the  cost  of  oil  in 
this  state? 

}Mr.  Barron :     I  do  not. 

|Mr.  Tompkins:     Don't  you  find  any  other  adulterations? 

[Mr.  Barron  :     We  don't  make  a  chemical  test. 

Mr.  Lord:     What  is  this  item  of  miscellaneous  inspections? 

Mr.  Barron :  That  comes  from  oil  companies  remitting  for  inspections 
which  got  by  the  deputies.  The  deputy  perhaps  got  no  check  or 
record  of  the  ear  and  the  company  made  remittance  for  it  afterward. 

Mr.  O'Brien :     Do  they  remit  for  cars  that  have  not  been  inspected  ? 

Mr.  Barron:  Yes.  You  see  oil  might  be  sent  to  a  new  station  where 
they  didn't  know  it  had  to  be  inspected,  and  when  the  record  got 
back  to  head  office,  they  would  remit  for  it. 

Mr.  O'Brien:  What  right  have  they  to  pay  such  a  fee?  What  right 
have  you  as  Oil  Inspector  in  Michigan  to  permit  it? 

Mr.  Lord:  What  right  have  you  to  allow  oil  to  be  sold  without  being 
inspected  ? 

Mr.  Barron :     It  would  probably  be  two  months  before  I  would  know  it. 

Mr.  Thompson:  There  is  a  big  possibility  of  a  lot  of  oil  in  Michigan 
not  being  inspected. 

Mr.  Barron     Not  a  big  possibility.     It  don't  occur  very  often. 

Mr.  Thompson:  There  is  a  possibility  of  other  cars  that  were  not 
inspected  where  companies  were  not  honest  enough  to  report. 

Mr.  Barron  :     Possibly  with  some  companies. 

Mr.  Thompson:     How  do  you  know  how  much  oil  comes  into  Lansing? 

Mr.  Barron :  All  the  check  I  have  is  what  the  deputy  reports  that  he 
inspected. 

:Mr.  Thompson:     What  check  has  he? 

Mr.  Barron:     He  has  none. 

Mr.  Thompson:     How  does  he  know  there  is  oil  here  to  be  inspected? 

| Mr.  Barron:     The  local  agent  calls  him  up. 

Mr.  Thompson:  Do  you  prosecute  anybody  for  not  reporting  these 
inspections? 

Mr.  Barron  :     Never  have. 

Mr.  Thompson :  Have  you  had  any  trouble  with  people  not  reporting  oil 
to  be  inspected? 

Mr.  Barron:  Just  a  few  cases,  where  new  stations  receive  it  or  some- 
thing like  that.  Never  have  reported  any  cases  to  the  Prosecuting 
Attorney.  There  is  a  case  pending  in  Monroe  county  now. 

Mr.  Thompson :  How  many  cases  of  prosecution  have  you  had  during 
your  term? 

Mr.  Barron:  Well,  the  prosecutions  are  in  the  hands  of  the  Prosecut- 
ing Attorney ;  all  I  do  is  to  turn  the  facts  over  to  him. 


194 

Mr.  Thompson :     Is  that  one  case  the  only  one  reported  to  a  prosecuting 

attorney  ? 
Mr.  Barren :     No. 

Mr.  Thompson :     Who  do  you  rent  your  office  from  ? 
Mr.  Barren :     Myself. 

Mr.  Thompson :     Who  is  your  stenographer  ? 
Mr.  Barron :     My  wife. 

Mr.  Thompson :     Your  record  shows  that  you  worked  on  red  can  inspec- 
tions three  hundred  and  four  days  last  year,  in  addition  to  your 

salary  as  inspector;  presumably  you  earned  your  salary  outside  of 

three  hundred  and  four  days  ? 
Mr.  Barron  :     Why,  as  I  related  to  Mr.  Lord,  I  attend  to  correspondence, 

supplies,  etc. 
Mr.  Thompson :     Do  your  deputies  make  any  reports  to  you  relating  to 

the  red  can  law  ? 
Mr.  Barron  :     Yes,  sir. 
Mr.  Thompson :     How  much  time  did  your  deputies  put  in  enforcing  the 

red  can  act  during  the  last  year? 
Mr.  Barron :     Some  of  the  deputies  put  in  more  than  others.     Salary  of 

each  is  given  in  the  report. 
Mr.  Thompson :     The  total  number  of  days  they  could  put  in,  counting 

every  day  they  could  collect  for  under  the  law,  is  2,248  days.     You 

put  in  304  days  supervising  2,248  days'  work. 
Mr.  Barron  :     Yes,  sir. 
Mr.  Thompson :     In  this  inspection  report  which  you  refer  to ;  inspector's 

expense  account  is  for  how  long  a  period  ? 
Mr.  Barron :     One  month. 
Mr.  Thompson:     How  many  inspections  under  the  red  can  law  did  he 

make  during  that  month  ? 
Mr.  Barron:     Eighteen  during  the  four  days  he  charged  up  for  that 

work. 

Mr.  Thompson :     In  how  many  towns  were  those  inspections  made  ? 
Mr.  Barron :     In  four  towns. 
Mr.  Lord :     Now,  Mr.  Barron,  to  get  back  to  the  collection  of  moneys  by 

deputies.     Don't  you  think  it  would  be  an  improvement  in  the  law 

if  you  were  to  bill  those  people  yourself  direct,  and  collect  the  fees, 

and  have  your  deputies  paid  in  a  regular  way,  the  same  as  other 

employes  of  the  state  government?    Don't  you  think  that  would  be  i 

an  improvement  ? 
Mr.  Barron:     Yes   sir. 
Mr.  Lord:     Why  don't  you  follow  a  better  office  practice  so  that  you 

would  have  a  check  on  these  receipts? 
Mr.  Barron:     The  law  does  not  allow  it. 

Mr.  Lord :     It  gives  you  authority  to  have  a  check  on  your  men. 
Mr.  Barron :     The  system  used  now  is  the  one  that  the  law  outlines. 
Mr.  Lord:     Nothing  in  the  law  prevents  you  from  making  a  report? 
Mr,  Barron:     No. 
Mr.  Lord :     Nothing  in  the  law  to  prevent  your  making  your  men  report 

all  receipts,  is  there? 
Mr.  Barron :     No. 
Mr.  Lord :     Nothing  in  the  law  to  prevent  your  billing  these  companies 

direct,  is  there? 


195 

Mr.  Barren:     No. 

Mr.  Lord:     Would  it  not  be  good  business  practice  to  do  that? 

Mr.  Barron :     Why,  I  can't  see  any  advantage  in  that. 

Mr.  Lord:  It  pays  as  a  general  business  proposition  to  keep  check  on 
men  who  are  making  expenditures  and  collecting  money  for  the 
state,  doesn't  it? 

Mr.  Barron:     Yes. 

Mr.  O'Brien :     What  district  was  this  uninspected  oil  distributed  in  ? 

Mr.  Barron:  I  couldn't  tell  you  because  I  haven't  the  records  with  me. 
I  think  there  was  a  car  in  the  Traverse  City  district. 

Mr.  O'Brien :  Do  you  know  of  any  accidents  or  fires  caused  from  explo- 
sions in  that  district? 

Mr.  Barron :     The  record  would  show ;  I  don't  remember  any. 

Mr.  O'Brien:     Is  that  the  only  district? 

Mr.  Barron :     No,  there  were  two  districts. 

Mr.  O'Brien:     Was  there  one  in  1917? 

Mr.  Barron :     Two  in  1916. 

Mr.  O'Brien:  The  fees  were  $47.00.  How  many  gallons  of  oil  would 
that  indicate? 

Mr.  Barron :     Two  tanks. 

NOTE. — A  count  of  the  holidays  in  1916  shows  that  there  were  fifty- 
two  Sundays  and  nine  holidays  which,  with  the  304  days  the  oil  inspector 

charged  for  red  can  inspections  during  the  year,  makes  a  total  of  365  days 

for  the  year. 

STATE   BOARD   OF   HEALTH 

Mr.  Lord:     Doctor,  you  are  the  Secretary  of  the  State  Board  of  Health? 

Dr.  Olin:     Yes,  sir. 

Mr.  Lord :  Will  you  state  to  the  commission,  as  briefly  as  possible,  the 
various  activities  of  the  State  Board  of  Health,  what  you  do,  what 
you  have  done,  and  what  you  hope  to  accomplish  in  the  future? 

Dr.  Olin:  All  of  the  communicable  diseases  are  reported  by  the  phy- 
sicians throughout  the  state  to  this  department.  Those  reports 
come  in  on  blanks  furnished  by  the  department.  The  physician 
reports  to  the  local  health  officer  and  the  health  officer  reports  to  us. 
As  those  come  in  they  are  recorded  in  books  kept  for  that  purpose, 
giving  name  and  address  of  patient — diseases  are  kept  separate — 
the  date  they  were  taken  sick,  and  their  determination,  whether  by 
death  or  recovery.  Those  books,  at  the  end  of  each  year,  are  com- 
piled by  our  statistician  and,  of  course,  all  errors  in  diagnosis  are 
followed  up ;  also  where  there  are  four  or  five  cases  in  a  community, 
we  immediately  correspond  with  the  physician  and  health  officers 
in  that  community  with  the  idea  of  rendering  any  assistance  possible 
in  checking  disease.  Every  morning,  the  clerk  that  gets  these 
reports  for  the  day  before,  makes  a  slip  of  the  number  having  each 
disease,  with  the  location,  and  then  the  stenographer  in  the  next 
office  brings  those  in  and  puts  tacks  in  the  map  for  each  case.  Where 
there  are  an  unusual  number  of  cases  appearing  on  that  map,  I  imme- 
diately get  into  communication  with  the  health  officer  and  find  out 
if  there  is  anything  we  can  do  to  assist  in  checking  the  epidemic. 
We  have,  under  the  Medical  Inspection  Act,  the  power  of  sending  any 


196 

physician  whom  we  choose  to  any  locality  to  instruct  and  assist  in 
diagnosing  the  case,  and  in  other  ways,  in  order  to  check  the  spread 
of  disease.  If  we  find  it  is  advisable,  we  send  a  doctor  who  has  had 
special  training  along  that  particular  line  to  the  locality  to  give  the 
local  physician  his  advice  and  help.  Down  at  St.  Clair,  there  is  an 
old  doctor  by  the  name  of  Smith,  who  knows  smallpox,  I  believe, 
better  than  any  other  doctor  in  Michigan.  We  use  him  whenever  we 
can  because  experience  has  taught  us  that  if  he  is  sent  to  a  locality 
where  smallpox  is  spreading,  the  epidemic  soon  dies  out.  We  also 
have  a  young  fellow  by  the  name  of  Goodwin  over  at  Bay  City.  We 
try  to  send  him  wherever  there  is  a  jangle  going  on,  because  he  is 
peculiarly  fitted  to  take  care  of  it  and  straighten  the  matter  out.  We 
send  these  men  out  to  assist  in  the  checking  of  disease  or  enforcing 
quarantine  and  things  of  that  kind. 
In  the  Laboratory  Division  we  analyze  water  samples. 
At  present  we  are  making  one  exclusive  study  of  a  beverage,  some 
sort  of  a  substitute  for  beer. 

There  were  1,129  different  analyses  made  in  the  laboratory  from 
November  1st  to  November  20th.  All  public  health  work  is  done 
free  of  charge  but  when  a  doctor  sends  something  in  for  personal 
benefit  or  the  benefit  of  his  patient,  we  charge  for  that,  just  enough 
to  cover  actual  expenses. 

The  Engineering  Department  has  furnished  for  your  use,  if  you  cave 
for  it,  a  report  of  its  last  year's  work  that  will  outline  their  work 
better  than  I  can. 

Then,  because  of  the  multiplicity  of  accounts  that  we  have  to  take 
care  of  (we  have  seven  different  appropriations},  we  have  to  keep  an 
Auditor  and  he  is  busy  most  of  the  time. 

Mr.  Lord  :  Who  makes  requests  for  those  various  appropriations?  Docs 
the  Board  of  Health? 

Dr.  Olin:  Yes,  sir.  From  time  to  time  as  the  department  has  grown 
they  have  added  these  different  departments  and  an  appropriation 
has  been  added  to  cover  the  expenses  of  same. 

Mr.  Lord:  Have  you  any  standing  appropriation?  That  is,  was  there 
ever  a  bill  appropriating  the  same  amount  of  money  for  each  year  of 
a  five-year  period? 

Dr.  Olin:  Fifteen  thousand  dollars  is  appropriated  for  running  our 
main  office.  I  think  the  statement  covers  that.  The  report  that  we 
have  given  you,  I  believe,  covers  all  the  financial  work  of  the  depart- 
ment. I  might  say  that  every  month  I  ask  our  Auditor  for  a  report 
like  this,  (report  shown)  which  shows  the  condition  this  month  as 
compared  with  the  same  month  a  year  ago. 

Mr.  Lord:  Will  you  tell  us  what  the  general  powers  of  the  board  are 
over  public  health  matters  in  the  state?  What  are  your  general 
powers  in  the  nature  of  regulation,  prevention  of  disease,  etc.  ? 

Dr.  Olin.  We  have  the  power,  for  instance,  to  designate  any  disease  as 
a  dangerous  communicable  disease,  and  have  absolute  control  over 
that  disease.  We  require  the  physician  to  report  that  disease  to  us 
and  we  can  take  care  of  it  as  the  board  rules.  We  can  make  our  own 
rules  and  regulations  under  the  law. 

Mr.  Lord:     Have  you  the  power  to  inspect  food,  water,  etc.? 


197 

Dr.  Olin:     Not  food,  that  is  under  the  Dairy  and  Food  Commissioner. 

We  have  nothing  whatever  to  do  with  that.    We  have  the  right  to 

condemn  any  water  supply. 

Mr.  Lord :     Do  you  make  inspections  of  water  supplies  ? 
Dr.  Olin:     We  make,  or  are  supposed  to  make,  semi-annual  inspections 

of  every  water  supply  in  the  state. 
Mr.  Lord:     Who  are  these  inspections  made  by? 
Dr.  Olin :     By  the  Sanitary  Engineer. 
Mr.  Lord:     How  does  he  do  that,  by  going  there? 
Dr.  Olin :     He  either  goes  there  or  sends  an  assistant.    We  are  supposed 

to  have  a  report  from  every  treatment  plant  in  the  state. 
Mr.  Lord:     If  you  find  anything  wrong,  what  powers  have  you  to  take 

care  of  it? 
Dr.  Olin:     We  have  the  power  to  condemn  the  supply  and  make  them 

correct  the  error. 

Mr.  Lord :     How  many  inspectors  do  you  have  out  in  the  state  ? 
Dr.  Olin :     We  have  at  the  present  time  only  one  regularly  paid  inspector. 

You  understand,  Mr.  Lord,  we  can  call  them  at  any  time  we  need 

them.    They  are  physicians  of  experience  along  certain  lines  and  the 

law  allows  us  to  pay  them  f  10.00  a  day  and  their  actual  expenses. 

Another  thing,  the  law  provides  for  a  Sanitary  Engineer,  but  it  does 

not  allow  for  any  assistants.    Those  are  employed  under  the  Medical 

Inspection  Act. 
Mr.  Lord :     What  was  the  total  number  of  inspections  of  various  classes 

made  last  year  and  what  was  the  cost? 
Dr.  Olin:     I  believe  Doctor  Eich  can  tell  you  about  that. 
Mr.  Lord:     Doctor  Rich,  you  are  the  Sanitary  Engineer  of  the  State 

Board  of  Health? 
Dr.  Kich:     Yes,  sir. 
Mr.  Lord :     Can  you  tell  the  commission  about  how  many  inspections  of 

water  you  made  last  year  and  about  how  much  it  cost? 
Dr.  Kich :  I  have  not  that  at  hand,  but  it  can  be  worked  out. 
Mr.  Lord:  Can  you  tell  approximately  how  many  inspections  you 

made? 
Dr.  Rich :     No,  that  would  be  a  hard  matter.    For  instance,  we  were  in 

the  city  of  Saginaw  in  January  or  February.    We  must  have  worked 

there  three  months,  testing  water  all  the  time.     At  that  time  we 

undoubtedly  got  a  large  number  of  samples,  and  again  we  might 

have  gone  to  another  town  and  only  got  one  sample. 
Mr.  Lord:     You  were  inspecting  well  water  in  Saginaw? 
Dr.  Rich :     Yes ;  the  water  of  Saginaw  is  furnished  by  means  of  wells  on 

the  corners. 

Mr.  Lord :     What  does  your  examination  of  the  water  consist  of  ? 
Dr.  Rich:     Bacteriological  examination,  according  to  the  United  States 

Public  Health  Association  standards. 
Mr.  Lord:     What  do  you  do  in  case  you  find  anything  wrong  in  any  of 

the  wells? 

Dr.  Rich:     Report  it  to  the  State  Board  of  Health  for  action. 
Mr.  Lord:     Has  the  Board  of  Health  authority  to  condemn  the  water? 
Dr.  Rich :     I  think  so. 
Mr.  Lord:    What  methods  do  you  follow  when  the  water  has  been  con- 


198 

demned?    Do  you  have  any  difficulty  in  compelling  the  owners  of 
the  wells  to  discontinue  the  use  of  the  water? 

Dr.  Rich :  We  surely  do.  We  have  often  had  to  take  the  handle  off  the 
pump.  It  is  pretty  hard  to  convince  the  ordinary  citizen  that  the 
water  in  his  well  is  not  fit  for  use. 

Dr.  Olin:  We  have  made  approximately  one  hundred  medical  inspec- 
tions during  this  year. 

Mr.  Lord:  Inspections  of  epidemics  in  a  town  or  of  some  one  person 
afflicted  with  disease? 

Dr.  Olin:  Either  one.  If  there  was  a  dispute  as  to  the  disease  or  an 
epidemic  in  the  town,  we  would  send  a  man  in  either  case. 

Mr.  Lord :     Do  you  have  any  authority  over  the  matter  of  sewerage  ? 

Dr.  Rich:     That  comes  under  the  Sanitary  Engineer. 

Mr.  Lord:  What  have  you  done  to  regulate  sewerage  during  the  last 
year?  For  instance,  in  the  city  of  Detroit? 

Dr.  Rich:  I  went  over  the  complete  scheme  that  has  been  worked  out 
in  Detroit  with  Mr.  Hubbel  this  spring.  We  have  been  in  close  touch 
with  it  for  some  time  and  some  of  the  designing  for  main  trunk 
sewers  has  been  worked  out  according  to  our  suggestions. 

Mr.  Lord:     Do  you  have  to  approve  their  plans? 

Dr.  Rich:     Sixty  days  after  they  are  built. 

Mr.  Lord :  What  do  you  do  if  sewers  are  built  which  do  not  conform  to 
your  rules? 

Dr.  Rich:  It  is  a  question  as  to  how  far  the  law  allows  us  to  go.  We 
think  we  have  full  authority  to  enforce  the  law,  but  are  not  quite 
sure. 

Mr.  Lord:     Does  this  affect  municipalities  and  country  districts  also? 

Dr.  Rich:  It  does  not  affect  country  districts  at  all,  just  the  munici- 
palities. 

Mr.  Lord :  What  was  the  total  cost  of  the  Engineering  Department,  or 
division,  of  the  State  Board  of  Health  last  year? 

Dr.  Rich :  We  will  have  an  annual  report  here  in  just  a  minute  which 
will  give  you  all  that.  We  will  furnish  you  a  copy  of  that  report,  if 
you  desire. 

Mr.  Lord:  Do  you  run  up  against  any  conflict  of  authority  with  local 
officers  in  your  work  or  do  they  co-operate  with  you  pretty  well? 

Dr.  Rich:  They  co-operate  pretty  well  when  they  get  what  we  are 
driving  at. 

Mr.  Lord:  What  do  you  do  in  case  of  typhoid,  for  instance?  Do  you 
give  directions  to  local  health  authorities,  or  how  is  this  handled? 

Dr.  Rich:  The  typhoid  examination  begins  with  a  thorough  study  of 
all  cases  and  then  we  see  how  those  things  compare,  and  after  a  while 
we  are  able  to  find  the  proper  cause.  As  soon  as  we  find  the  cause 
we  are  in  a  position  to  lay  that  before  the  local  authorities,  and,  if 
the  trouble  is  not  already  remedied,  we  can  take  proper  steps  to 
remedy  it.  Oftentimes  the  trouble  has  been  remedied.  If  the  cause 
has  not  been  remedied,  we  advise  them  what  to  do  to  eliminate  it. 
If  it  should  happen  to  be  a  matter  of  public  water  supply,  and  they 
refuse  to  do  anything,  we  take  steps  to  condemn  the  water. 

Mr.  Lord:  Do  you  find,  in  the  different  localities,  competent  health 
officers  ? 

Dr.  Rich :     No,  sir,  we  don't.     Of  course,  sometimes  we  do. 


199 

[r.  Lord:     What  is  the  trouble? 

>r.  Rich:  Chiefly  pay;  $25.00  a  year  isn't  a  great  deal  of  money,  and 
it  don't  give  them  much  ambition  to  look  after  the  work. 
Olin :  Most  of  these  cases  are  in  country  districts,  where  they 
appoint  some  farmer  or  supervisor,  or  somebody  with  nothing  else 
to  do,  as  the  health  officer,  and  the  result  is  a  great  deal  of  incompe- 
tency  on  the  part  of  the  health  officer.  If  they  were  compelled  to 
appoint  a  competent  health  officer,  we  could  handle  it  better. 
Thompson:  As  I  analyze  the  public  health  work,  it  is  to  prevent 
all  infection  and  communicable  disease.  To  that  end,  you  first  make 
your  rules;  second,  you  provide  methods  for  making  diagnosis  and 
reports;  then  you  take  up  the  matter  of  quarantine  and  prevention, 
and  the  laboratory  work.  Then  comes  the  other  phase  of  work 
which  is  under  the  control  of  Doctor  Rich,  the  sanitary  engineer. 
Lord :  What  publication  do  you  get  out,  Dr.  Olin  ? 
Olin :  We  publish  a  monthly  bulletin  which  is  descriptive  of  things 
going  on  along  different  lines  of  interest  to  the  layman,  but  not  in  a 
technical  way.  Last  month,  our  mailing  list  was  something  around 
twenty  thousand,  but  on  the  back  of  the  bulletin  that  is  coming  out 
now,  we  have  put  a  statement,  asking  that  they  fill  it  out  and  return 
to  us  if  they  desire  to  receive  these  bulletins.  I  expect  to  cut  our 
mailing  list  in  two.  These  bulletins  are  used  for  school  work.  They 
use  them  in  the  teaching  of  hygiene,  good  health  work,  etc.  In 
that  journal  the  vital  statistics  or  the  disease  rate  for  the  month 
is  shown  and  contains  our  report  for  the  month.  I  understand  that 
the  vital  statistics  division  of  the  Secretary  of  State's  office  gets  out 
something  similar  to  that. 
Lord :  Do  you  cover  all  the  vital  statistics  ? 

Olin :     Yes,  sir,  we  state  everything  that  is  reported  to  this  office. 
Lord :     How  often  do  you  collect  the  information  ? 
Olin :     Every  day ;  in  fact,  every  mail.     We  make  a  compilation  and 
publish  it  in  tabulated  form  in  our  annual  report. 
Lord :     It  is  practically  a   duplication  of  what  the  Secretary  of 
State  issues,  is  it? 
Olin :     It  would  be  if  they  agreed. 

Lord :  What  is  the  object  of  two  departments  collecting  and  pub- 
lishing the  same  information? 

Olin:  We  have  to  use  that  information  in  keeping  track  of  epi- 
demics. The  Secretary  of  State's  office  gives  purely  vital  statistics 
just  as  they  occur.  We  show  different  methods  of  control  of  dis- 
eases. 

Lord :     You  gather  this  yourself  and  classify  it  ? 
Olin:     Yes,  sir. 

Mr.  Thompson :  You  cover  every  phase  of  the  things  that  the  reports  of 
the  Secretary  of  State  cover? 

Dr.  Olin :  Except  births  and  marriages.  We  get  the  deaths  from  them. 
Now,  there  is  a  situation  here  that  I  think  is  wrong.  We  get  death 
reports  from  them  and,  for  instance,  last  week  our  statistician  got 
out  a  lengthy  table  and  it  did  not  prove  to  be  correct.  Our  statis- 
tician went  over  to  the  Secretary  of  State's  office  and  they  said  they 
had  forgotten  to  send  in  twenty  or  thirty  reports  last  week. 


200 

Mr.  Lord :  Couldn't  the  Vital  Statistics'  Department  be  under  the  State 
Board  of  Health? 

Dr.  Olin:  I  see  no  reason  why  it  could  not.  As  I  told  you,  we  have 
been  held  up  in  getting  out  our  annual  reports  on  account  of  the 
vital  statistical  division  of  the  Secretary  of  State's  Department  not 
being  able  to  agree  with  the  United  States  Government  on  classifi- 
cation. 

Mr.  Thompson :  What,  in  your  judgment,  should  be  the  ideal  conditions 
in  this  office ;  the  ideal  plan  of  operation  from  a  point  of  view  of  the 
whole  state,  and  its  activities  in  public  health  matters? 

Dr.  Olin:  In  my  opinion,  the  laws  should  be  re-vamped  in  such  a  way 
that  we  would  have  a  single  appropriation.  As  the  appropriations 
are  made  now,  every  appropriation  covers  a  different  phase  of  our 
work.  If  a  single  appropriation  was  made  to  the  State  Board  of 
Health  to  carry  on  all  its  activities,  then  in  case  one  department 
should  have  some  peculiar  thing  come  up;  for  instance,  some  large 
epidemic  appearing,  or  something  like  that,  we  could,  in  our  discre- 
tion, use  this  money  where  we  would  get  the  best  results;  and  by 
doing  this  could  use  the  funds  so  appropriated  to  better  advantage 
and  do  better  work  in  the  department.  Some  of  our  expenses  are 
increasing  right  along.  For  instance,  two  years  ago  we  could  hire 
bacteriologists  and  chemists  in  our  laboratory  for  a  great  deal  less 
money  than  we  can  today  because  all  those  fellows  have  gone  to  the 
front. 

Mr.  Lord :     Of  course  those  are  abnormal  conditions. 

I  have  always  thought  that  the  Vital  Statistics  Division  should  be 
under  the  Board  of  Health.  They  have  somewhere  around  twenty 
or  twenty-five  clerks  and  the  average  salary  would  be  f  1,000.00  a  year 
for  each  clerk,  leaving  out  the  chief  of  the  division  who  gets  f  1,500.00. 
That  would  make  it  run  from  twenty  to  twenty-five  thousand  dollars 
a  year  for  salaries  and  postage  expenses.  Then,  they  send  out 
approximately  9,000  of  their  Vital  Statistics  Bulletins  every  month, 
and  besides  they  have  a  large  correspondence,  sending  out  for  cor- 
rections of  reports,  etc.  The  total  cost  of  that  division  is  not  less 
than  $30,000  a  year,  in  my  opinion.  Now,  can  you  tell  us  just  about 
how  much  you  think  the  same  work  could  be  done  for  in  this  depart- 
ment? That  is,  in  addition  to  what  the  cost  of  this  department  is 
now.  If  the  Vital  Statistics  Division  was  placed  in  the  Board  of 
Health  Department,  what  saving  could  be  made  to  the  taxpayers  of 
the  state  and  of  what  additional  benefit  would  it  be  to  the  people  of 
the  state? 

Dr.  Olin :     That  is  pretty  hard  to  say. 

Mr.  Thompson:  What  additional  expense  would  it  be  to  your  depart- 
ment? 

Dr.  Olin:    What  is  the  cost  of  the  publishing  of  their  bulletin? 

Mr.  Lord :     We  have  a  record  of  that  at  the  office. 

Dr.  Olin:  Well,  the  cost  of  it  would  be  largely  eliminated.  It  would 
simply  add  in  this  department  the  necessity  of  a  sufficient  number  of 
clerks  to  handle  that  work.  What  that  would  be,  I  don't  know 
exactly. 

Mr.  Lord:  What  information  do  they  get  now  that  you  don't  receive? 
It  is  very  important  that  we  know  this  as  we  may  make  a  recom- 
mendation in  regard  to  it. 


201 

Mr.  Thompson:     Undoubtedly  it  would  be  a  saving  in  at  least  half  of 
the  amount  spent  to  carry  on  the  Vital  Statistics  Department  as  it 
now  is. 
Dr.  Olin :     If  I  could  see  what  it  is  costing  them  to  run  it  at  this  time,  I 

could  easily  tell  you. 
Mr.  Lord :     Not  less  than  f  30,000.00. 
Dr.  Olin :     How  much  of  that  is  for  publications  ? 
Mr.  Lord :     That  bulletin  is  all  they  publish.     The  cost  of  that  is  not  so 

very  much.     Do  you  send  to  the  same  mailing  list  ? 
Dr.  Olin :     We  possibly  cover  at  least  a  part  of  the  same  report,  and  we 

have  practically  the  same  information. 
Mr.  Lord :     That  part  of  it  would  be  entirely  eliminated. 
Dr.  Olin:     You  could  absolutely  eliminate  the  cost  of  their  publication 
including  postage.     We  might  have  to  add  a  few  more  names  to  our 
mailing  list. 

Dr.  Olin :     To  me,  the  key-note  of  this  department  is  that  every  day  that 
we  let  a  man  suffer  from  a  communicable  disease,  or  a  life  is  lost 
from  such  a  disease,  it  is  an  economic  loss  somewhere. 
Mr.  Lord:     Dr.  Olin,  these  financial  statements  show  the  amounts  dis- 
bursed from  your  f!5,000.00  appropriation.     What  is  the  amount 
you  draw  from  the  general  fund  in  addition  to  that? 
Dr.  Olin:     The  medical  inspection  fund  is  the  only  additional  fund  we 

draw  from. 

Mr.  Lord :     What  I  want  to  get  at  is  the  total  cost  of  the  entire  depart- 
ment for  the  last  year. 
Dr.  Olin:    $57,938.68  is  the  total  cost  for  everything  during  the  fiscal 

year  ending  June  30th,  1917. 

Mr.  Lord :     Now  then,  Doctor,  what  additional  activities,  if  any,  do  you 
propose  to  engage  in  in  the  future?    Have  you  anything  at  all  in 
mind? 
Dr.  Olin:     Well,  there  will  of  necessity  be  an  increase  of  the  activities 

in  the  department,  along  the  venereal  line. 
Mr.  Lord :     Is  that  going  to  cost  very  much  ? 
Dr.  Olin:     The  greatest  amount  of  cost  is  coming  during  the  first  few 

months.     The  War  Board  is  taking  care  of  that. 
Mr.  Lord:     The  War  Board  is  going  to  meet  that  expense? 
Dr.  Olin:     Yes,   except   the   doctor's   services,   which   come  under   the 
medical  inspection  act,  and  what  traveling  I  do  personally  will  come 
under  that  act. 

Dr.  Rich:  Also  along  the  line  of  additional  activities,  the  last  legisla- 
ture passed  an  act,  requiring  an  examination  of  all  the  streams  in 
the  state  with  reference  to  the  pollution  of  same.  The  Public 
Domain  Commission  is  to  report  these  matters,  the  Attorney  Gen- 
eral to  co-operate  with  them,  and  the  Board  of  Health  to  furnish 
the  engineering  services. 
Mr.  Lord :  Has  the  Public  Domain  Commission  made  any  effort  to  carry 

out  the  provisions  of  that  law  ? 

Dr.  Kich :     I  don't  think  so.     I  was  talking  with  Mr.  Carton  about  this 
matter;  how  to  go  at  it;  how  much  it  would  cost,  etc.,  and  it  was 
left  to  Mr.  Oates  and  myself  to  make  the  canvass  and  report  to  the 
Board  of  Auditors  as  to  how  much  it  would  cost. 
Mr.  Lord :    Have  you  ever  made  this  report  ? 


202 

Dr.  Rich :     No,  sir. 

Mr.  Lord :  This  is  undoubtedly  why  the  Public  Domain  Commission  has 
not  taken  any  action  on  the  matter.  Can  you  tell  us  how  much  the 
cost  would  be? 

Dr.  Rich:  The  cost  would  be  unlimited  to  carry  it  out  as  the  act  now 
stands,  $200,000  or  more.  I  think,  however,  we  can  get  at  it  without 
any  such  expense  as  that.  We  have  information  in  the  office  now, 
enough  to  enable  us  to  draw  our  conclusions  and  make  recommenda- 
tion to  the  legislature. 

Mr.  Lord :  Doctor  Olin,  what  examining  boards  do  you  have  under  this 
department  ? 

Dr.  Olin :     Nothing  but  the  Embalmers'  Board. 

Mr.  Lord :  Tell  us  very  briefly  about  that  licensing  board  for  emba liners. 
How  often  do  they  hold  examinations? 

Dr.  Olin :     Twice  a  year. 

Mr.  Lord :     Why  should  embalmers  be  licensed  ? 

Dr.  Olin :  The  law  requires  them  to  have  eighth  grade  certificates  from 
the  public  school,  and  certain  knowledge  in  Anatomy  and  Physiology. 

Mr.  Thompson:  What  other  examining  boards  in  your  judgment  ou^lit 
to  be  consolidated  with  this  department? 

Dr.  Olin :  That  is  a  question  that  I  don't  know.  There  is  a  board  that  I 
am  a  member  of,  by  virtue  of  my  being  Secretary  of  the  State  Board 
of  Health,  the  Board  of  Registration  of  Nurses.  Personally,  I  do  not 
think  much  of  this  board.  They  are  raising  the  standard  of  nurses 
right  along.  It  is  their  idea  that  no  nurses  can  be  licensed  to  practice 
nursing  in  the  State  of  Michigan  unless  they  are  graduates  of  a  high 
school.  This  nurses'  board  is  a  sore  spot  in  my  side.  I  would  like 
very  much  if  I  could  be  relieved  from  acting  on  this  board. 

Mr.  Lord:     Who  are  the  members  of  the  board? 

Dr.  Olin :  Dr.  Peterson,  who  has  been  in  charge  of  the  hospital  at  Ann 
Arbor,  and  three  women.  These  women  are  all,  with  the  exception 
of  one,  connected  with  some  training  school  for  the  graduation  of 
nurses.  If  you  were  at  the  head  of  a  training  school  with  a  board  in 
back  of  you  passing  on  these  examinations,  it  would  be  pretty  hard 
to  be  unbiased.  It  is  a  fight  to  see  which  school  shall  be  represented 
on  the  board  most  of  the  time. 

Mr.  Thompson:  The  same  thing  would  exist  as  to  medical  schools  and 
the  Board  of  Registration  in  Medicine. 

Dr.  Olin  :  The  law  covering  the  Board  of  Registration  in  Medicine  reads 
that  no  member  of  said  board  shall  belong  to  the  faculty  of  any 
medical  college  or  university.  And  the  Board  of  Registration  of 
Nurses  should  be  the  same  way.  No  one  connected  with  any  training 
school  for  nurses  should  be  on  that  board. 

Mr.  Thompson:     Should  nurses  be  examined  and  registered? 

Dr.  Olin :     I  don't  think  it  is  of  much  importance. 

Mr.  Thompson:     How  about  pharmacists? 

Dr.  Olin :     They  should  be  examined. 

Mr.  Thompson:  Should  that  class  of  board  examination  be  conducted 
under  the  auspices  of  the  State  Board  of  Health? 

Dr.  Olin:     I  would  hardly  want  to  say. 

Mr.  Thompson :  To  put  it  briefly,  would  it  not  be  wise  to  have  the  med- 
ical examinations,  examinations  as  to  optometry,  dentistry,  medi- 


203 

cine,  registration  of  nurses,  barbers  and  embalmers,  all  carried  on 
by  the  State  Board  of  Health? 

Dr.  Olin:  It  would  be  a  great  saving  of  expense  and  it  would  be  done 
just  as  efficiently. 

Mr.  Thompson:     What  other  activities  should  be  licensed? 

Dr.  Olin :  The  food  dealers,  particularly  restaurant  and  hotel  help 
handling  food. 

Mr.  Thompson:  These  should  be  passed  upon  to  what  extent;  in  what 
way  and  how  often? 

Dr.  Olin:  Either  semi-annually  or  annually  for  the  assistance  in  pre- 
vention of  tubercular  and  venereal  diseases.  A  board  could  be 
formed,  consisting  of  the  Dairy  and  Food  Commissioner,  Commis- 
sioner of  Labor,  Secretary  of  the  Board  of  Health,  and  the  Pure  Food 
Inspector.  They  could  have  police  powers  over  this  class  of  busi- 
ness, and  could  enforce  the  law  with  no  added  cost  to  the  state. 

Mr.  Lord:  Can  you  think  of  anything  else  that  should  be  covered  by 
examination  for  licenses? 

Dr.  Olin :     I  don't,  just  at  this  time. 

Mr.  Thompson  :  Then,  as  I  understand  the  reason  of  these  examinations, 
it  is  to  protect  the  public  and  raise  the  standard. 

Dr.  Olin :  Yes,  I  believe  also  that  barbers  should  be  under  this  board 
more  than  any  of  the  rest.  There  isn't  any  class  that  scatters  dis- 
ease like  barbers. 

Mr.  Thompson :  Is  there  any  way  that  a  central  laboratory  might  be 
worked  out,  for  yourself  and  for  the  pure  food  department? 

Dr.  Olin:  I  believe  there  should  be  a  laboratory  for  the  Pure  Food 
Department,  Sanitary  Live  Stock  Commission,  and  the  State  Board 
of  Health.  One  state  laboratory  for  the  different  departments  to 
include  the  bacteriological  work,  medical  work,  etc.  It  could  all  be 
done  in  the  same  laboratory. 

Mr.  Lord :  What  is  the  idea  of  having  two  state  laboratories  for  the 
Board  of  Health,  one  here  and  one  at  Houghton? 

Dr.  Olin :  Well,  as  a  matter  of  convenience  and  protection.  A  swab 
comes  in  from  a  diphtheria  case  and  they  want  a  report  on  it  in  a 
very  few  hours.  The  efficiency  of  one  of  these  laboratories  depends 
on  the  quickness  of  the  work,  and  by  having  a  laboratory  in  the 
Upper  Peninsula  we  can  attend  to  these  matters  within  a  short 
length  of  time.  I  have  a  great  many  complaints  saying  that  they 
don't  get  their  report  in  the  length  of  time  that  they  think  they 
should.  For  this  reason,  I  have  just  placed  here  in  the  office  a  book 
where  everything  is  registered  when  it  arrives  and  the  clerk  can  tell 
when  it  should  be  reported  out,  and  it  is  up  to  her  not  to  let  me 
catch  any  of  those  things  not  reported  at  the  proper  time.  This 
morning  I  found  a  sample  that  I  thought  should  have  been  reported 
out  yesterday>  but  on  investigation  I  found  that  it  was  a  doubtful 
case  and  that  they  wanted  to  make  another  slide  of  it. 
Mr.  Thompson:  Do  you  think  of  any  other  activities  that  should  be 

centered  in  this  department? 
Dr.  Olin :     No,  I  don't  think  of  any  other. 

Mr.  Thompson:  With  your  present  facilities,  what  would  be  the  cost 
per  individual  if  your  department  was  to  furnish  the  required 
treatment,  if  it  should  be  furnished,  to  the  inmates  in  the  prisons? 


204 

Dr.  Olin :  That  is  very  hard  to  tell  just  now.  We  have  received  notice 
that  the  German  patents  have  been  put  out  of  use  and  that  the  gov- 
ernment has  issued  permits  to  certain  companies  here  to  manufac- 
ture these  drugs. 

Mr.  Thompson:  Are  those  treatments  so  that  they  could  be  prepared 
in  your  laboratory  ? 

Dr.  Olin :     Yes,  I  think  so. 

Mr.  Thompson :  With  a  central  laboratory  it  would  mean  a  consider- 
able saving  to  the  people  of  the  state. 

Dr.  Olin :  There  is  another  situation  that  could  be  made  a  great  saving 
to  the  people  over  all  the  state;  the  antitoxin  for  diphtheria  has 
been  made  by  one-half  dozen  different  companies  until  just  recently. 
The  United  States  Government  has  now  taken  it  over  and  are  estab- 
lishing a  standard.  The  local  health  departments  furnish  in  many 
cases,  and  should  in  every  case,  antitoxin  and  vaccination  to  the 
delinquents,  to  the  poor  of  the  district.  The  charge  for  those  things 
has  depended  upon  the  part  of  the  state  in  which  it  is  used,  their 
accessibility  to  the  city,  etc. 

Mr.  Lord:     Who  does  vour  laboratory  work  now? 

Dr.  Olin:     Dr.  Spoor. 

Mr.  Thompson:  What  line  of  procedure,  as  to  prevention  of  disease, 
particularly  relative  to  vaccination,  etc.,  would  reduce  and  possibly 
eliminate  any  public  disease  we  now  have? 

Dr.  Olin:  If  we  could  furnish  and  compel  vaccination  as  they  do  in 
Germany,  it  would  wipe  out  smallpox  in  a  very  short  time. 

Mr.  Lord :  Getting  back  to  the  matter  of  transferring  other  boards,  etc., 
•  to  the  State  Board  of  Health;  what  do  you  think  of  the  proposition 
of  transferring  the  Board  of  Registration  in  Medicine? 

Dr.  Olin:     That  is  done  in  other  states. 

Mr.  Lord:     The  Board  of  Examination  of  Osteopaths? 

Dr.  Olin :     I  don't  know  about  that. 

Mr.  Thompson :     Presumably  it  should  be. 

Dr.  Olin :     I  think  it  should. 

Mr.  Lord:  Under  the  law,  do  they  have  to  have  some  knowledge  of 
medicine  ? 

Dr.  Olin:  Yes,  they  should  have  a  good  knowledge  of  anatomy  at 
least. 

Mr.  Lord:  It  seems  to  me  that  all  matters  relating  to  public  health 
should  be  under  one  board.  Don't  you  think  that  is  true?  Don't 
you  think  that  these  matters  could  all  be  handled  by  your  board? 

Dr.  Olin:  Yes,  I  think  that  is  true.  We  have  some  excellent  men  on 
this  board. 

Mr.  Lord :  There  are  so  many  boards  connected  with  the  public  health 
question  that  the  average  citizen  doesn't  know  to  whom  to  go  for 
information. 

Dr.  Olin:  If  these  boards  could  be  centralized  and  a  little  something 
paid  each  man  so  he  could  afford  to  leave  his  practice,  it  would  be 
more  satisfactory. 


205 

STATE  TAX  COMMISSION 

Mr.  Lord:  Mr.  Benton,  you  are  a  member  of  the  State  Board  of  Tax 
Commissioners  ? 

Mr.  Benton :     I  am. 

Mr.  Lord:  Will  you  state  to  the  Budget  Commission  what  the  various 
activities  of  the  Tax  Commission  are,  what  you  do,  what  you  have 
accomplished,  and  what  you  propose  to  do? 

Mr.  Benton:  Well,  now,  gentlemen,  you  perhaps  will  appreciate  the 
fact  that  this  is  my  first  year,  and  I  can  only  speak  for  what  has 
happened  during  the  past  year.  We  have  made  reviews  in  various 
counties : 

Baraga  County:  Special  review  of  property  of  Sturgeon  Kiver  Land 
and  Development  Company  in  the  townships  of  Baraga,  Covington 
and  L'Anse. 

Chippetva  County:    Work  in  charge  of  Mr.  Snody.    Reviews  held  in 
all  districts  except  Dafter,  Detour  and  Trout  Lake  townships. 
Leelanau  County:    Work  in  charge  of  Mr.  Baker.     Reviews  held  for 
all  districts  except  Centerville,  Solon  and  Suttons  Bay. 
Lcnawee  County:     Work  in  charge  of  Mr.  Hatch.     Reviews  held 
for  all  districts  except  Hudson  City. 

Mackinac  County:    Work  in  charge  of  Mr.  Snody.    Reviews  held  for 
all  districts  except  Garfield,  Hudson  and  Marquette  townships. 
Menomince  County:    Work  in  charge  of  Mr.   Snody.     Review  for 
Nadeau  township  only. 

Roscommon  County:  Work  in  charge  of  Mr.  Barrett.  Review  for 
Nester  township  only. 

Schoolcraft  County:  Work  in  charge  of  Mr.  Snody.  A  regular 
review  was  held  for  Thompson  township  and  a  special  review  on 
property  of  Blaney  and  Southern  Railway  Company  in  Mueller  town- 
ship, and  of  White  Marble  Lime  Company  in  Doyle  township,  which 
had  been  omitted  from  the  assessment  rolls. 

Washtenaw  County:  Work  in  charge  of  Mr.  Thorington.  Reviews 
held  for  all  districts.  A  special  review  was  also  held  at  Ypsilanti  to 
correct  valuations  of  bank  stock. 

Wayne  County:  Work  in  charge  of  Mr.  Harris.  Reviews  held  for 
all  districts  except  Detroit  City  proper,  which  was  held  last  year.  A 
special  review  was  also  held  in  the  city  of  Detroit  on  special  prop- 
erties. 

Mr.  Lord :  You  say  that  in  School  craft  county,  some  property  had  been 
omitted  from  the  roll  entirely;  for  how  long? 

Mr.  Benton :     I  would  have  to  ask  Mr.  Burtless. 

Mr.  Burtless:  I  think  just  this  roll.  It  was  property  of  the  Marble 
Lime  Company  and  they  had  no  property  in  previous  years. 

Mr.  Benton:  In  addition  to  what  I  have  already  outlined,  we  have,  or 
are  now  at  work  on  the  following  counties : 

Alger  County:  Work  in  charge  of  Mr.  Snody.  Farm  lands  com- 
pleted. Timber  examinations  now  being  made. 

Clare  County:  Work  in  charge  of  Mr.  Thorington.  Now  in 
progress. 

Benzie  County:    Work  in  charge  of  Mr.  Hatch.     Now  in  progress. 
Isabella  County:    Work  in   charge  of   Mr,   Thorington.     Now  in 
progress. 


206 

Lapeer  County:  Work  in  charge  of  Mr.  Hatch.  Now  in  progress. 
Midland  County:  Work  in  charge  of  Mr.  Twiss.  Now  in  progress. 
Manistce  and  Mason  Counties:  Work  in  charge  of  Mr.  Harris.  Now 
in  progress. 

Luce  County:  Field  books  were  made  in  the  spring.  No  examina- 
tions made. 

Grand  Traverse  County:    Work  in  charge  of  Mr.  Barrett  and  com- 
pleted.    Tax  Commission  figures  adopted  by  the  supervisors. 
Iron  County:    Work  in  charge  of  Mr.  Harris.     Examinations  made 
of  the  city  of  Crystal  Falls  and  the  township  of  Iron  River. 
Wexford  County:    Work  in  charge  of  Mr.  Jaehnig.     Making  field 
books. 

Mecosta  County:  Work  in  charge  of  Mr.  Phillips.  Making  field 
books. 

Ontonagon  County:  Work  in  charge  of  Mr.  Barry.  Making  field 
books. 

Mr.  Lord :  In  addition  to  holding  reviews,  etc.,  what  other  activities  do 
the  Tax  Commission  have? 

Mr.  Benton:  Well,  we  meet  with  the  Supervisors.  We  have  made  an 
effort,  and  it  is  my  intention,  and  I  think  the  other  members  will 
agree  with  me,  to  meet  as  many  of  the  different  boards  of  super- 
visors as  possible,  and  we  are  also  contemplating  the  taking  up  and 
holding  of  county  conferences,  in  order  to  get  back  to  the  taxpayers 
themselves.  Have  a  conference  with  the  taxpayer's  or  the  assessing 
officer  and  explain  the  object  of  our  commission;  what  benefits  are 
to  be  derived,  etc.  We  find  that  a  great  majority  of  the  assessing 
officers  of  Michigan  are  familiar  with  our  work  and  agreeable  to  it, 
but  the  people  whom  they  represent  are  not  in  position  to  know  very 
much  about  it,  the  Supervisor  has  to  be,  or  is,  in  a  great  many 
instances,  guided  by  what  his  constituents  want,  whether  it  is  right 
or  wrong. 

Our  idea  is  to  get  to  the  taxpayers  and  explain  to  them,  and  thereby 
relieve  the  assessing  officers  of  a  lot  of  that  responsibility. 

Mr.  Lord:  What  have  you  done  by  way  of  covering  the  state  in  the 
matter  of  reviews?  How  nearly  are  you  through? 

Mr.  Benton :  Ten  counties,  or  a  few  more,  that  have  not  been  com- 
pleted, around  fifteen,  I  guess,  isn't  it  Fred? 

Mr.  Burtless:  Only  ten  that  have  not  been  at  some  time  reviewed  by 
the  Tax  Commission. 

Mr.  Lord:  What  force  will  you  require  after  you  have  completed  the 
reviews  of  the  remaining  ten  counties? 

Mr.  Benton :  Now,  gentlemen,  this  is  my  own  idea  ;  I  think  that  twenty 
men  will  take  care  of  all  the  work  of  this  state.  Have  less  in  num- 
ber and,  with  the  aid  of  the  Supervisor,  I  am  of  the  opinion  that  at 
no  time  will  we  require  more  than  twenty  field  men. 

Mr.  Lord :     How  many  have  you  now  ? 

Mr.  Benton  :     About  fifty ;  forty-nine  at  present. 

Mr.  Lord :  How  long  do  you  expect  it  to  take  to  complete  the  reviews 
of  the  state? 

Mr.  Benton :     It  is  our  intention  to  finish  the  state  this  year. 

Mr.  Lord:  After  that  you  think  that  twenty  men  will  about  cover  the 
field? 


207 

Mr.  Benton :     That  is  my  idea. 

Mr.  Lord:     Have  you  talked  with  the  other  commissioners  about  that? 

Mr.  Benton :     Not  to  any  great  extent. 

Mr.  Lord:     What  will  your  men  have  to  do  after  the  reviews  are  over? 

Mr.  Benton :  My  idea  would  be  to  have  the  men  make  investigations  to 
see  that  the  assessments  had  been  kept  up  in  accordance  with  the 
provisions  of  law,  and  where  it  was  found  that  the  Supervisor  had 
attempted  to  fall  back  to  the  old  way  of  assessing,  the  commission 
would  take  it  up.  By  a  process  of  reasoning  and  teaching  they  could 
do  the  work  themselves  and  do  it  properly. 

I  want  to  say  that  the  work  that  we  contemplate  doing,  getting  into 
the  various  counties  and  talking  with  taxpayers  and  assessing  officers 
together,  to  my  mind  is  going  to  relieve  the  situation  greatly,  I  am 
firmly  of  the  opinion  that  as  soon  as  we  can  educate  the  people  to 
the  justice  of  this  proposition,  so  that  they  understand  and  know 
definitely  that  they  are  fairly  and  honestly  treated,  that  a  large 
amount  of  this  trouble  will  be  obviated;  also  a  large  amount  of 
expense.  This  work  is  going  to  lend  us  a  great  amount  of  aid. 
When  you  go  out  and  put  a  few  hundred  million  dollars  on  the  tax 
rolls,  and  make  no  reduction  of  tax  rate,  it  is  pretty  hard  to  explain 
to  the  people  the  great  amount  of  good  done. 

Mr.  Lord:     Would  that  not  mean  a  cutting  down  of  your  office  force? 

Mr.  Burtless:  Not  very  much.  Our  office  work  continues  about  the 
same.  Our  office  force  is  not  very  large,  anyway. 

Mr.  Lord :  What  do  you  do  in  the  matter  of  assisting  the  State  Board 
of  Equalization? 

Mr.  Benton :  That  is  a  matter  that  I  have  as  yet  had  no  part  in.  I 
understand  that  by  law  we  are  supposed  to  gather  data  to  submit 
to  the  State  Board  of  Equalization,  showing  the  value  <of  each  and 
every  one  of  the  counties  of  the  state. 

Mr.  Burtless :     That  has  been  done. 

Mr.  Lord :  What  disposition,  or  in  other  words,  how  has  the  State 
Board  of  Equalization  treated  that  data  in  the  matter  of  equalizing 
counties  ? 

Mr.  Burtless :  Up  to  this  time  it  has  not  accepted  the  figures  as  recom- 
mended by  the  State  Tax  Commission.  They  have  placed  the  figures 
at  what  they  determined  was  the  real  valuation,  raising  some  and 
lowering  others. 

Mr.  Lord :  What,  in  the  opinion  of  the  Tax  Commission,  is  the  remedy 
for  that  condition  ?  Where  the  state  spends  a  large  amount  of 
money  for  arriving  at  the  valuation  for  the  express  purpose  of  bring- 
ing about  correct  equalization ;  what  is  the  remedy  ? 

Mr.  Benton :  If  our  work  is  of  the  standard  it  should  be,  there  cer- 
tainly is  no  reason  why  it  should  not  be  accepted.  We  are  in  a  posi- 
tion to  know  definitely,  and  we  ought  to  be  in  position  to  know  better 
than  the  State  Board  of  Equalization,  to  some  degree  of  certainty, 
the  actual  valuation  of  the  different  counties.  , 

Mr.  Lord:  The  State  Board  of  Equalization  has  always,  practically, 
ignored  the  figures  turned  in  by  the  Tax  Commission.  What  should 
be  done  to  remedy  that  condition?  Would  you  favor  the  abolish- 
ment of  the  State  Board  of  Equalization  and  substituting  something 
else,  a  modification  of  the  present  plan  or  system  ? 


208 

Mr.  Benton :     That  is  rather  a  delicate  question. 

Mr.  Lord :  This  commission  would  like  to  know.  We  would  like  to  get 
that  information  from  people  who  know  best. 

Mr.  Benton:  As  one  member  of  the  commission,  I  should  feel  that  it 
would  be  up  to  us  to  see  to  it  that  each  and  every  county  was  assessed 
correctly,  and  if  assessed  correctly  it  is  automatically  equalized,  and, 
therefore,  it  would  need  no  further  equalization  on  the  part  of  any 
board. 

Mr.  Lord:  Then  your  idea  is  that  the  State  Board  of  Equalization 
could  be  abolished,  if  every  county  is  assessed  at  cash  value? 

Mr.  Benton:  Absolutely.  Every  county  would  be  assessed  at  cash 
value.  I  apprehend  that  that  will  be  so,  approximately  so.  You 
could  not  get  it  to  a  dollar,  but  nearer  than  ever  before. 

Mr.  Lord:  You  understand  that,  under  the  constitution,  there  has  got 
to  be  an  equalization ;  would  it  not  be  a  very  simple  matter  for  the 
State  Tax  Commission  to  fix  the  equalized  value  ? 

Mr.  Benton :  That  is  my  idea ;  that  if  the  State  Board  of  Equalization 
is  abolished,  it  be  referred  to  this  board  to  do  that. 

Mr.  Lord :  What  do  you  do  in  the  matter  of  complaints  from  the  various 
townships  on  county  equalization? 

Mr.  Benton :  Well,  we  investigate  it  and,  if  we  feel  that  the  complaint 
is  a  just  one,  we  go  there  and  make  an  investigation  and  make  the 
equalization.  During  the  past  year,  we  had  no  occasion  to  do  that. 
Two  started  out  to  make  complaints  and  withdrew  them. 

Mr.  Lord:  That  is  done  at  the  expense  of  the  taxpayers  of  the  whole 
state.  For  instance,  a  complaint  in  Ingham  county  is  made,  you  go 
and  make  an  investigation  which  costs  some  money,  and  that  is 
spread  on  the  tax  rolls  of  the  state  at  large,  is  it  not? 

Mr.  Benton:  I  am  inclined  to  tell  you  that  that  is  true,  but  I  think  it 
is  wrong.  I  think  where  there  is  an  appeal  taken  that  the  township 
taking  the  appeal  should  bear  the  expense,  if  the  appeal  is  not  sus- 
tained. 

Mr.  Burtless :  There  is  a  provision  in  the  law, .  I  believe,  that  if  the 
appeal  is  not  sustained  by  the  tax  commission,  the  expenses  are  to 
be  borne  by  the  township  making  the  complaint.  That  has  been 
construed  to  refer  only  to  the  expense  of  calling  together  the  Board 
of  Supervisors,  and  there  never  has  been  any  charge  to  the  county  or 
townships  for  the  work  of  the  commission. 

Mr.  Lord:  What  are  the  real  benefits  to  the  people  of  the  state  from 
your  reviews  and  equalizations;  to  what  extent  do  the  people  of 
the  state  reap  any  benefit- along  those  lines? 

Mr.  Kearney:  It  brings  about  a  more  equitable  adjustment  of  the  tax 
levy. 

Mr.  Benton:     Between  individuals  and  between  districts. 

Mr.  Lord :  Of  what  benefit,  to  your  knowledge,  has  the  work  been  that 
you  have  been  doing  in  connection  with  the  state  equalization? 

Mr.  Kearney:  Why,  of  course,  the  State  Board  of  Equalization,  with- 
out the  data  gathered  for  them  by  the  Tax  Commission,  would  be 
almost  useless  in  making  an  equalization.  They  could  not  equalize 
the  state  as  they  would  have  no  means  of  knowing  the  value  of  the 
various  counties  of  the  state.  Of  course,  I  know  how  they  did  do 
that  prior  to  the  date  the  Tax  Commission  was  required  to  furnish 


209 

this  information ;  representatives  of  the  several  counties  came  before 
them  and  they  made  their  claims  or  statements,  and  from  that  the 
State  Board  of  Equalization  made  up  the  state  equalization.  Now, 
from  the  knowledge  that  I  have,  and  we  all  have,  we  know  that  the 
information,  or  rather  their  equalization,  was  not  based  upon  any 
knowledge  that  they  could  possibly  have  had  of  the  various  counties. 

Mr.  Lord:  On  the  other  hand,  how  closely  have  they  followed  your 
figures  ? 

Mr.  Kearney :  Except  in  a  few  instances  they  have  followed  our  recom- 
mendations. I  know  that  two  years  ago,  in  1914  it  was,  that  I  was 
present  during  all  the  sessions.  While  I  am  not  a  member  of  that 
board,  I  was  present  at  that  time  and  I  think  there  were  only  a  few 
counties  that  were  changed  from  our  recommendations.  Members 
from  the  different  counties  came  up  and  all  consented  to  our  figures, 
and  said  they  were  satisfactory,  but  that  if  any  change  was  made 
they  wanted  to  be  considered.  If  our  figures  were  adopted  as  a 
whole,  they  were  perfectly  satisfied,  excepting  in  Wayne,  St.  Clair 
and  in  Lenawee.  There  was  f  1,000,000.00  taken  from  Lenawee, 
and  a  few  small  changes,  don't  recall  the  amount;  from  Wayne 
county  about  $85,000,000.00,  and  I  think  they  took  $5,000,000.00  off 
from  St.  Clair. 

Mr.  Lord:  In  several  cases  they  have  practically  ignored  the  Tax 
Commission  and  followed  the  recommendations  of  the  representa- 
tives from  the  counties.  What  would  be  your  remedy  for  that  ? 

Mr.  Kearney :  I  believe  it  will  remedy  itself.  The  only  way  it  could  be 
prevented,  if  it  does  not,  is  to  have  the  three  members  of  the  Tax 
Commission  have  a  vote  upon  the  State  Board  of  Equalization,  or 
have  them  members  of  that  board. 

Mr.  Lord:  Will  one  of  you  gentlemen  give  us  information  about  your 
work  as  the  State  Board  of  Assessors  ? 

Mr.  Kearney:  The  law  requires  that  the  State  Tax  Commission  shall 
act  as  the  State  Board  of  Assessors.  I  think  it  was  in  April,  1900, 
about  that  time,  that  the  railroads,  telephone  and  telegraph  com- 
panies, and  other  companies  paying  specific  tax,  were  put  upon  an 
advalorem  basis,  and  required  to  pay  taxes  on  their  true  cash  value 
at  the  average  rate  of  taxation,  for  all  purposes  except  special  taxes ; 
and  the  State  Board  of  Assessors  was  created  at  that  time  by  mak- 
ing the  Tax  Commission  the  Board  of  Assessors.  In  the  first 
instance,  the  valuation  was  made  of  the  railroads  and  these  other 
companies,  and  then,  every  year  since,  they  have  been  gone  over  and 
checked  up.  They  are  required  to  report  upon  blanks  we  furnish 
them ;  and  prior  to  the  amendment  of  the  law  by  the  last  session  of 
the  legislature,  those  blanks  had  to  be  in,  and  what  we  call  a  tenta- 
tive assessment  had  to  be  ready  on  January  15th,  and  then  we  held 
a  review.  Notice  was  served  upon  all  these  corporations  of  the 
amount  of  their  assessments  and  then  we  sit  as  a  Board  of  Review 
and  all  those  that  cared  to  come  in  and  object  to  their  assessments 
could  do  so  and  we  gave  them  a  hearing.  If  we  thought  that  they 
were  entitled  to  changes,  we  made  them.  The  assessments  had  to 
be  completed  on  the  15th  of  February  and  the  roll  in  the  hands  of 
the  Auditor  General  the  first  of  March.  I  think  it  has  been  changed 
now  to  the  15th  of  February  that  these  reports  have  to  be  in,  and  the 


210 

roll  in  the  hands  of  the  Auditor  General  on  the  first  of  June,  witk 
all  those  proceedings  between.  The  average  rate,  of  course,  is  j 
obtained  by  requiring  reports  from  every  supervisor  and  assessor  in 
the  state — some  sixteen  hundred.  Those  reports  show  the  total 
amount  of  the  assessed  value  of  all  the  property  in  every  assessing 
district ;  show  all  the  taxes  paid  for  state,  county,  schools,  city,  all 
except  special  taxes,  and  then  adding  all  reports  up,  dividing  the 
amount  of  taxes  by  the  total  assessed  value,  the  average  rate  is 
obtainable,  and  that  is  the  rate  these  corporations  shall  pay.  These 
taxes  so  collected  from  them  are  turned  over  to  the  Primary  School 
Fund. 

Mr.  Lord:     What  classes  of  corporations  come  under  this  law? 

Mr.  Kearney :  Railroads,  telephone,  telegraph,  fast  freight  companies, 
express  companies,  sleeping  car  companies,  etc. 

Mr.  Lord:     How  many  of  them  do  you  have  to  assess  altogether? 

Mr.  Kearney :     I  don't  know,  something  like  five  or  six  hundred. 

Mr.  Burtless :  In  the  neighborhood  of  five  hundred  companies  actually 
assessed;  we  are  required  to  get  reports  from  about  two  thousand. 

Mr.  Kearney:  There  are  about  twelve  hundred  telephone  companies 
that  we  don't  assess,  as  we  don't  assess  telephone  companies  under 
the  law  unless  their  income  is  f 500.00  a  year. 

Mr.  Lord :  How  long  a  time  do  you  have  in  which  to  make  the  assess- 
ment? 

Mr.  Kearney:  The  reports  are  in  on  the  ir>th  of  February  now;  we 
have  between  that  time  and  the  first  of  June,  when  the  roll  has  to  be 
in  the  hands  of  the  Auditor  General. 

Mr.  Lord:  Do  you  think  that  is  sufficient  time  to  give  it  proper  atten- 
tion and  consideration? 

Mr  Kearney:     I  do. 

Mr.  Lord:  That  is  because  all  the  data  is  gathered,  examined  and 
passed  on  before  that  by  your  secretary  and  office  force? 

Mr.  Kearney :  Yes.  We  have  thought  that  a  re-valuation  of  railroads 
should  be  made.  • 

Mr.  Lord :  What  is  the  basic  valuation  that  you  follow  in  making  your 
assessments  ? 

Mr.  Kearney:  Cooley- Adams  appraisal  in  1900;  then,  that  has  been 
checked  up  by  Mr.  Parker,  but  no  late  valuation  has  been  made  since 
that  time. 

Mr.  Burtless :  The  first  appraisal  was  made  after  actual  inspection  andi 
examination  of  physical  property;  after  that  no  examination  was 
made. 

Mr.  Lord:  What  would  be  your  plans  in  making  a  re-valuation  of  the 
railroads  ? 

Mr.  Kearney :     I  have  never  attempted  to  lay  out  a  plan. 

Mr.  Benton:  I  couldn't  give  you  any  definite  ic|ea.  It  is  a  problem 
that  would  take  quite  a  lot  of  thought. 

Mr.  Lord:  Have  you  talked  it  over  among  yourselves  in  meetings  oi 
the  commission  that  such  a  thing  ought  to  be  done  and  have  yon 
decided  to  make  any  recommendations  in  regard  to  it? 

Mr  Kearney:  We  have  talked  it  over  in  a  general  way,  but  have  nevei 
come  to  any  decision  in  the  matter. 

Mr.  Lord :     Don't  you  know  what  the  cost  would  be  ? 


211 

Mr.  Kearney:     Have  no  idea. 

Mr.  Lord :  Is  it  your  idea  that  the  valuation  of  railroads  would  be 
increased  under  such  appraisal,  or  would  it  be  a  more  equitable 
adjustment  ? 

Mr.  Kearney :  I  think  there  would  be  a  more  equitable  adjustment  and 
unquestionably  the  valuations  would  be  increased. 

Mr.  Burtless :  And  the  Tax  Commission  would  have  a  more  recent  basic 
valuation  to  work  on  in  the  future. 

That  work  was  done  during  the  year  ending  June  30th,  1901,  and  the 
total  cost  was  $120,152.00.  There  was  never  any  separate  account 
kept  of  railroad  appraisals.  I  should  judge  they  would  estimate  it 
around  $100,000.00. 

Mr.  Lord :  What  are  the  primary  causes  of  the  increase  in  taxes  and 
tax  levies,  both  local  and  state? 

Mr.  Kearney :  Of  course,  that  is  due  to  general  conditions ;  it  costs  more 
to  live  now  than  it  did  fifteen  years  ago ;  labor  is  higher,  everything 
you  buy  costs  more.  A  dollar  don't  go  as  far  as  it  did  then.  I 
couldn't  say  that  there  is  any  waste  or  extravagance  as  far  as  our 
department  is  concerned ;  we  try  to  keep  it  down  as  low  as  possible. 

Mr.  Lord :  I  am  speaking  now  of  all  taxes  levied ;  not  the  cost  of  state 
departments,  but  all  taxes  levied. 

Mr.  Kearney:  It  applies  all  down  the  line;  it  costs  a  farmer  more  to 
live  now  than  it  did  in  1900 ;  everything  he  buys  is  higher,  farm  tools 
and  everything  is  higher. 

Mr.  Lord :  Isn't  the  primary  cause,  that  the  people  look  for  a  good  deal 
more  nowadays  and  spend  more? 

Mr.  Kearney :  People  are  not  satisfied  now  with  what  they  put  up  with 
a  few  years  ago;  they  want  recreation,  automobiles,  better  clothes, 
etc. ;  they  lose  time  from  their  work  and  spend  more  money.  All 
those  things  enter  into  it. 

Mr.  Lord:  It  is  a  fact,  isn't  it,  Mr.  Kearney,  that  the  taxes  have 
increased  at  a  much  more  rapid  rate  than  the  increased  valuation? 

Mr.  Kearney:     Yes,  that's  true. 

Mr.  Lord:  And,  really  it  is  a  condition  that  is  somewhat  alarming, 
because  there  is  no  telling  where  it  will  end. 

Mr.  Kearney:  That's  true.  Of  course,  one  of  the  causes  possibly  for 
the  increase  in  taxes  is  due  to  the  fact  that  now  nearly  all  the  taxes 
are  paid  from  assessments  on  real  estate.  Even  with  the  work  we 
are  doing,  it  is  pretty  difficult  for  us  to  get  a  great  amount  of  per- 
sonal estate,  and  the  trouble  is  that  under  the  law  now  so  much  is 
exempt.  That  throws  the  burden  upon  real  estate. 

Mr.  Lord:     What  would  be  your  remedy  for  that? 

Mr.  Kearney:  Well,  I  have  never  quite  agreed  with  the  legislature.  I 
believe,  in  fact,  we  should  recommend  that  the  mortgage  tax  be 
repealed,  and  I  don't  believe  that  all  forms  of  bond  securities  should 
be  exempt  (foreign  and  municipal  bonds  are  exempt  and  I  guess 
nearly  all  are) .  I  know  that  I  may  have  been  wrong,  but,  at  the  time, 
I  opposed  it  in  the  legislature  and  talked  with  some  of  the  members 
about  it  and  plso  to  Governor  Ferris. 

Mr.  Lord:  Your  idea  is  that  that  class  of  security  should  be  taxed  the 
same  as  all  general  property? 


212 

Mr.  Kearney :  No,  I  do  not  think  that.  I  think  the  constitution  should 
be  amended  so  that  we  could  classify  property.  We  should  have  a 
low  rate  of  tax  that  these  intangibles  should  pay,  three  or  four  mills, 
and  I  believe  the  people  would  disclose  the  personal  property.  A 
large  amount  of  money  would  be  realized  and  it  would  be  no  hard- 
ship upon  the  people  that  would  have  to  pay  it.  No,  I  don't  think 
it  would  be  right  to  tax  mortgages  and  bonds  at  the  regular  rate  of 
taxation;  that's  confiscatory  in  many  instances.  If  money  in  the 
bank,  mortgages,  bonds,  etc.,  would  pay  three  or  four  mills,  I  don't 
know  how  much  it  would  bring,  but  it  would  bring  a  lot  of  money 
to  the  treasury  of  the  state  and  would  not  be  a  hardship  to  the 
people. 

Mr.  Lord:  An  annual  specific  tax  on  that  class  of  property  would  help 
out  a  lot,  would  it  not? 

Mr.  Kearney :     Yes,  that  would  be  a  great  improvement. 

Mr.  Lord:  Do  you  make  any  particular  efforts  to  get  at  the  personal 
property  ? 

Mr.  Kearney:  Yes,  we  do.  We  have  a  man  for  that  purpose  but  there 
is  so  little  of  it.  Of  course,  in  Detroit,  we  get  millions  of  it  in  land 
contracts. 

Mr.  Lord:  What  was  the  aggregate  assessed  valuation  last  y»ar  of  all 
the  public  service  corporations  that  you  assessed? 

Mr.  Burtless:  The  total  assessments  made  by  the  State  Board  of 
Assessors  last  year  were  $271,451, 500.00. 

Mr.  Lord :  What  was  the  aggregate  amount  of  taxes  paid  on  that  valua- 
tion last  year? 

Mr.  Burtless :  The  amount  levied  was  $4,628,720.91 ;  we  have  no  record 
of  the  amount  actually  paid. 

Mr.  Lord:  How  does  the  amount  of  taxes  paid  on  the  levy  last  year 
compare  with  former  years;  was  it  more  or  less? 

Mr.  Burtless:     It  was  less  than  some  of  the  other  years. 

Mr.  Lord:  That's  by  reason  of  lowering  the  average  rate  of  taxation 
caused  by  your  increasing  the  valuation  of  general  properties  in 
local  communities;  have  you  heard  any  criticism  of  that? 

Mr.  Kearney:     I  have  not. 

Mr.  Lord:  Getting  back  to  the  matter  of  appraisals  of  railroads;  have 
you  ever  given  any  thought  to  a  re-appraisal  of  all  the  public  service 
corporations  which  you  assess? 

Mr.  Kearney:     Nothing  ^except  the  railroads. 

Mr.  Lord:  You  couldn't  approximate  the  cost  of  a  re-appraisal  of  all 
the  public  service  corporations? 

Mr.  Kearney:  No,  I  could  not.  We  have  a  pretty  good  check  on  the 
Bell  Telephone  Company;  we  have  had  several  appraisals  and  there 
is  their  report  to  the  Railroad  Commission  for  bonding  purposes. 
We  have  considerable  information,  except  as  to  railroads.  We 
have  a  telephone  man  employed  all  the  time  on  telephone  work — 
Mr.  McCormick.  So  that  I  believe  that  an  appraisal  of  the  other 
properties  that  we  assess  as  a  State  Board  of  Assessors  would  not  be 
immediately  necessary. 

Mr.  Burtless:  I  might  say  right  there  that  a  complete  appraisal  of  all 
telephone  companies  was  made  under  direction  of  the  board  in  1909. 
Mr.  McCormick  was  engaged  on  that  work  and  has  been  in  the 
deDartment  ever  since. 


213 

Mr.  Lord :  What  do  you  think  of  the  proposition  of  creating  an  office  of 
State  Engineer  who  would  work  under  the  supervision  of  the  Rail- 
road and  Tax  Commissions;  who  would  have  charge  of  re-appraisals? 

Mr.  Kearney:     I  have  never  heard  it  spoken  of  before. 

Mr.  Lord:     Would  it  save  any  money  in  the  matter  of  re-appraisals? 

Mr.  Kearney:  Yes,  because  if  you  had  a  man  big  enough  to  do  that 
work,  he  could  do  it  cheaper  undoubtedly  than  to  employ  men  like 
Mr.  Cooley  or  Mr.  Adams. 

Mr.  Lord:  That  question  came  up  in  connection  with  the  survey  we 
made  at  the  Railroad  Commission  offices.  We  ascertained  that  a 
very  large  amount  of  money  had  been  paid  out  in  the  last  few  years 
for  appraisals  of  public  service  corporations. 

Mr.  Kearney:  Yes,  I  presume  that  that  is  constantly  before  the  Rail- 
road Commission. 

Mr.  Lord:  Do  you  ever  use  any  of  those  appraisals  made  by  Professor 
Cooley,  and  his  men,  either  for  your  assessments  or  reviews,  as  a 
basis  for  your  valuations? 

Mr.  Kearney :  We  always  get  copies  of  those  reports  from  the  Railroad 
Commission. 

Mr.  Lord :  In  some  of  those  cases  there  has  been  a  very  large  difference 
of  opinion  between  various  men  as  to  actual  values. 

Mr.  Kearney:  Yes,  the  reports  that  they  make  for  the  Railroad  Com- 
mission for  bonding  purposes,  and  reports  to  the  Tax  Commission  or 
assessors  for  tax  purposes,  differ  widely. 

Mr.  Lord:  Mr.  Kearney,  after  you  have  completed  your  review  work, 
what  reduction  of  your  field  force  will  you  make,  approximately? 

Mr.  Kearney:  We  have  made  a  big  reduction  now,  and  when  our  field 
work  is  once  completed,  we  have  not  decided  how  many  men  we 
will  need.  I  should  imagine  that  we  would  not  need  over  twelve. 

Mr.  Benton :     I  put  it  at  twenty. 

Mr.  Kearney :  I  may  be  putting  it  too  low.  The  expense  of  our  depart- 
ment after  next  year  will  be  very  materially  reduced. 

Mr.  Lord :  Is  there  any  way,  Mr.  Kearney  or  Mr.  Burtless,  that  you 
could  increase  the  efficiency  of  your  department? 

Mr.  Burtless:  There  is  no  question  in  the  world  but  that  we  could 
make  some  improvements.  I  think  that  when  we  come  to  the  weeding 
out  process  we  will  increase  our  efficiency. 

Mr.  Kearney :  We  have  been  very  careful  in  selecting  our  field  force  to 
get  only  efficient  men.  All  the  men  in  charge  of  the  work  have  been 
in  the  employ  of  the  commission  for  years;  some  of  them  since  it 
was  first  organized. 

Mr.  Lord:  Is  there  anything  at  all  that  you  need,  or  can  do,  which 
would  tend  to  increase  the  efficiency  of  your  department? 

Mr.  Kearney:  By  constant  care  and  supervision  on  the  part  of  the  com- 
missioners themselves,  which  we  have  been  doing.  We  have  not  left 
this  to  the  men;  we  have  been  devoting  all  the  time  to  supervision 
of  the  work,  so  that  we  are  familiar  with  the  work  of  the  men.  Our 
foremen  are  men  of  intelligence  and  men  of  large  experience  in  this 
work,  and  they  are  required  to  keep  in  constant  touch  with  the  field 
force  under  them.  I  sometimes  marvel  at  the  knowledge  of  the 
foremen  of  certain  work  in  some  counties.  I  held  reviews  over  in 
Lenawee  County  last  year  in  some  tweaity  townships.  We  had  a 


214 

foreman  over  there  and,  at  the  reviews,  he  worked  right  along  with 
the  examiners  and  seemed  as  familiar  with  the  property  as  the  men 
who  actually  did  the  work.  They  are  all  trained  in  that  regard. 

Mr.  Lord:  When  you  appoint  a  man  on  your  field  force,  what  con- 
stitutes the  necessary  qualifications  of  the  applicant  for  the  position? 

Mr.  Kearney:  In  the  first  place,  we  see  him  and  talk  to  him  and  we 
can  pretty  nearly  tell  in  talking  to  a  man  whether  he  is  a  competent 
man.  We  give  him  a  verbal  examination,  and,  if  we  think  he  is 
competent,  we  put  him  in  as  a  field  clerk  with  a  good  field  man. 
If  he  makes  good  in  that,  he  is  promoted  in  time  or,  if  not,  he  is 
dropped.  Sometimes  we  have  had  men  who  claim  to  have  had 
experience  as  supervisors  in  this  work,  and  we  could  not  use  them 
at  all,  and  again  we  have  had  men  with  no  experience  in  that  line 
of  work  until  they  came  with  the  Tax  Commission,  who  have  proven 
themselves  to  be  capable  men. 

Mr.  Kearney :  In  the  first  place,  we  have  schools  for  inspection.  We  get 
our  men  together  and  assign  subjects  to  the  different  men  to  prepare 
papers  on,  and  those  subjects  are  all  discussed.  The  commissioners 
themselves  talk  on  different  phases  of  the  work.  We  also  have  a 
question  box  and  if  there  are  any  questions  that  they  care  to  ask, 
they  can  put  them  in  the  box,  and  all  those  questions  are  answered 
and  discussed.  They  are  also  told  how  to  appear  and  are  given  an 
identification  card,  for,  when  any  of  our  men  go  to  a  taxpayer,  he 
must  introduce  himself.  They  are  not  permitted  to  get  any  informa- 
tion in  any  underhanded  way.  They  must  at  all  times  maintain 
themselves  in  a  gentlemanly  manner.  We  want  them  to  be  clean- 
shaven, neat  and  clean.  We  start  a  new  man  with  a  good  field  man 
and  tinder  a  good  foreman.  The  foreman  sends  in  a  report  to  us  on 
the  character  of  his  work. 

Mr.  Lord:     Have  you  a  foreman  in  every  county  where  you  are  working? 

Mr.  Kearney:     Yes,  sir. 

Mr.  Lord:     He  is  constantly  moving  around  among  the  men? 

Mr.  Kearney:  Yes,  and  we  look  to  him  for  the  success  of  our  work  in 
that  particular  county. 

Mr.  Lord:  What  is  the  nature  of  the  report  he  makes  to  the  commis- 
sion? 

Mr.  Kearney:  In  the  first  place,  the  men  working  in  a  county  are 
required  to  make  weekly  reports  to  their  foreman.  The  foreman 
sends  those  reports  to  the  Tax  Commission,  with  any  memorandum 
or  note  upon  them  that  he  desires  to  make.  These  reports  show  the 
number  of  days,  the  number  of  hours  they  work,  the  number  of 
pieces  of  property  they  examine  and  their  expenses ;  show  just  what 
is  done  each  day. 

Mr.  Lord :  Do  you  have  a  similar  report  of  the  work  done  every  day 
by  your  office  force  ? 

Mr.  Kearney:  No,  that's  under  Mr.  Burtless,  our  Secretary.  We 
couldn't  keep  track  of  our  men  if  we  did  not  have  those  reports. 
We  know  what  a  man  is  doing.  We  know  if  he  is  cheating  by  the 
amount  of  work  he  does.  We  know  how  many  pieces  of  property 
he  should  examine  and,  in  a  few  instances,  we  found  that  they  were 
cheating  and  dropped  them,  even  if  they  were  competent. 

Mr.  Lord :     Are  you  under  the  graded  salary  law  here  ? 


215 

Mr.  Burtless:  Yes,  as  far  as  the  office  force  and  field  clerks  are  con- 
cerned. 

Mr.  Lord:  Do  you  have  any  trouble  to  get  help  to  start  at  $800.00  a 
year — that  is,  competent  help? 

Mr.  Burtless :  Not  much,  because  the  men  that  we  hire,  if  they  make 
good,  are  promoted  as  fast  as  possible. 

Mr.  Lord :  What  do  you  think  of  a  proposition  to  remove  the  minimum 
salary  from  the  law  and  fix  a  maximum  and  an  average  salary,  so 
that  it  would  give  the  executive  head  of  the  department  some  little 
leeway  in  determining  what  salaries  should  be  paid? 

Mr.  Kearney:  That  matter  was  up  last  year  and  I  appeared  before  the 
Senate  and  favored  the  bill  to  make  a  maximum  and  put  it  up  to 
the  different  departments  as  to  the  minimum.  We  certainly  would 
run  our  department  as  cheaply  as  possible.  The  average  is  a  little 
dangerous,  because,  when  you  get  things  going,  you  have  to  keep 
somebody  down  low  to  give  someone  else  a  high  salary. 

Mr.  Lord:  Don't  you  think  that  such  a  change  in  the  law  would  be  a 
pretty  good  idea  ? 

Mr.  Kearney :  I  do.  I  was  surprised  it  did  not  go  through  last  session, 
as  I  know  the  chairman  of  the  committee  and  two  or  three  others 
agreed  with  me  at  that  time. 

Mr.  Lord :     What  was  the  reason  it  was  killed  ? 

Mr.  Kearney :     That  I  don't  know. 

Mr.  Burtless :  The  bill  was  passed  finally,  but  it  left  the  minimum  and 
increased  the  maximum  to  |1, 300.00  and  the  average  to  |1, 100.00. 

Mr.  Lord:  What  do  you  think  of  the  vacation  period  allowed  by  the 
statute  to  department  clerks? 

Mr.  Kearney :  Twenty-four  days ;  well,  I  think  that's  all  right.  I  favor 
that. 

Mr.  Lord  :     You  don't  think  it  is  too  much  ? 

Mr.  Kearney:  Well,  the  men  in  our  office  don't  take  it.  For  instance, 
Mr.  Harris,  I  don't  think  he  has  taken  a  day  off  in  two  or  three  years  ; 
then  there  are  others  that  want  every  day  that  is  coming. 

Mr.  Burtless:  You  take  men  working  outside  all  the  time,  away  from 
home,  two  days  a  month  is  not  too  much  to  give  them. 

Mr.  Kearney:  No,  I  believe  it  is  a  decent  thing  to  do.  They  work  better 
for  having  had  the  days  to  go  home  and  are  more  contented. 

Mr.  Lord:  I  refer  mostly  to  clerks  in  the  offices.  I  don't  think  many 
private  offices  give  that  much  vacation. 

Mr.  Kearney:  They  probably  don't  give  them  that  much,  usually  two 
weeks,  and  I  believe  that  it  is  right  to  give  them  vacation.  You  get 
better  service,  your  employes  feel  better,  and  they  take  a  better 
interest  in  their  work. 

Mr.  Lord:  They  should  have  a  vacation,  no  question  about  that.  But 
should  an  employe  in  a  political  office  enjoy  a  longer  vacation  period 
than  the  ordinary  employe  doing  a  similar  work  in  a  private  office? 

Mr.  Kearney:  Whatever  would  be  a  fair  general  average  throughout 
the  state  would  be  fair  in  the  state  offices. 

Mr.  Lord:     Would  you  say  that  same  thing  about  hours  of  work? 

Mr.  Kearney :  Yes,  their  hours  are  not  very  long  anyway.  But  in  this 
office  our  clerks  work  from  8  until  12,  and  from  1  until  4,  and  fre- 


216 

quently  in  the  evenings.  If  there  is  any  work  to  be  done,  they  don't 
stop.  Now,  you  take  a  man  or  woman  who  will  sit  steadily  during 
all  that  time  and  do  work  in  this  office,  it  is  time  for  them  to  quit 
when  it  is  4  o'clock 


MICHIGAN  RAILROAD  COMMISSION 

Mr.  Lord:  We  would  like  to  have  you  make  a  statement  to  the  com- 
mission, setting  forth  the  various  activities  of  the  Railroad  Commis- 
sion. 

Mr.  Glasgow:'  Of  course,  when  the  commission  was  created,  September 
28th,  1907,  we  succeeded  to  the  work  of  the  Railroad  Commissioner, 
in  a  large  measure ;  some  few  things  having  been  added.  Then,  the 
legislature  of  1909  added  to  the  duties  of  the  Railroad  Commission, 
which  you  undoubtedly  largely  understand.  They  pertained  largely 
to  physical  conditions,  such  as  train  operations,  track  conditions, 
stations,  crossing  protection,  etc.,  which  have  heretofore  been  gen- 
erally under  the  jurisdiction  of  the  Railroad  Commissioner.  Then, 
as  I  stated,  the  legislature  of  1909  thought  there  was  more  that 
three  men  could  do,  so  they  began  to  add  new  duties,  jurisdiction 
over  rates  as  to  railroads  and  express  companies,  the  handling  of 
claims,  etc.  In  1911,  they  gave  us  jurisdiction  over  the  water- 
power  that  is  generating  electricity ;  over  telephone  companies ;  the 
control  of  electric  light  companies  and  gas  companies,  and  other 
public  utilities;  also  over  the  issuance  of  stocks  and  bonds.  Our 
jurisdiction  over  these  public  utilities  was  just  so  far  as  securities 
were  concerned,  and  not  so  far  as  rates  were  concerned.  The  legis- 
lature of  1911  simply  strengthened  some  of  the  acts  which  gave  us" 
jurisdiction  over  some  of  the  utilities  named. 

The  work  of  the  commission  is  practically  divided  among  the  three 
members  of  the  commission  in  this  manner :  Commissioner  Cunning- 
ham looks  after  all  business  pertaining  to  physical  condition  of 
railroads,  furnishing  of  empty  cars,  removing  of  loaded  cars,  speed 
of  trains  over  dangerous  tracks,  determining  whether  track  is  dan- 
gerous or  not,  the  protection  of  crossings  in  cities,  highway  crossings 
in  the  country,  and  by  a  law  passed  in  1913,  I  think,  in  connection 
with  the  highway  department,  he  has,  representing  this  commission, 
authority  to  determine  whether  a  highway  shall  cross  a  railroad  or 
not,  and,  if  so,  at  what  point. 

In  matters  relating  to  telephone  companies,  those  come  primarily  to 
Commissioner  Keiser,  as  does  also  correspondence  in  relation  to  the 
issuance  of  securities;  also  the  settlement  of  claims,  which  do  not 
originate  from  an  erroneous  application  of  rates. 
The  matter  of  rates  of  every  character,  except  telephone,  electric 
light,  express  and  freight  rates,  comes  to  me.  No  decision  of  any 
member  is  rendered  except  that  the  matter  is  either  heard  by  or 
submitted  to  the  full  board.  In  matters  of  minor  importance  we 
have  found  it  necessary  that  the  party  before  whom  the  work  pri- 
marily comes,  may  sit  at  the  hearing,  if  necessary,  alone,  but  ordi- 
narily two  out  of  the  three  sit  at  the  hearing  and  then  submit  a 
record  of  the  hearing,  or  make  concise  statement  of  same  to  the 


217 

other  member  or  members  of  the  board,  before  an  opinion  is  given. 
That,  we  find  necessary  by  reason  of  the  fact  that  when  we  all 
attempt  to  sit  at  all  the  hearings,  we  couldn't  do  the  work,  or 
begin  to  do  it. 

There  has  been  application  made  for  an  advance  in  rates  by  approxi- 
mately one  hundred  and  forty  telephone  companies  in  the  last  thirty 
days.  Those  varied  conditions  demand  a  separate  hearing  in  every 
case  and,  in  some^  cases,  the  appraisal  of  property.  In  some  cases 
we  accept  the  appraisal  of  property  made  by  themselves. 

Mr.  Lord :     Who  makes  those  appraisals  ? 

Mr.  Glasgow:  If  the  appraisal  has  been  made  within  a  recent  period 
by  a  person  in  no  way  connected  with  the  company,  a  man  who  has 
a  standing  recognized  by  the  public  in  general,  we  accept  that 
appraisal.  If  there  is  any  question  in  our  mind  as  to  sufficiency 
of  information  or  correctness  of  appraisal,  or  anything  which  leads 
us  to  believe  it  might  be  colored  in  the  least,  then  the  commission 
appoints  the  appraiser.  As  a  rule,  we  have  employed  someone  in 
connection  with  the  University  at  Ann  Arbor ;  we  have  had  Professor 
Cooley  do  a  lot  of  work  for  us  in  telephone  line  matters.  In  water- 
power  appraisals  the  law  permits  us  to  send  for  information,  and,  if 
not  sufficiently  complete  to  meet  our  approval,  we  have  the  property 
appraised  by  Professor  Cooley's  staff,  or  if  conditions  surrounding 
that  particular  appraisal  do  not  make  it  advisable,  then  we  have 
somebody  outside  of  his  staff. 

Mr.  Lord:  Do  you  know  what  expense  it  has  been  to  the  state  on  an 
average,  each  year,  for  making  those  appraisals? 

Mr.  Glasgow:  As  I  recall,  the  only  expense  the  state  has  been  put  to 
is  the  appraisal  of  a  property  now  before  the  department.  The 
expense  of  the  state  for  expert  engineering  services  was  in  one  case 
an  electrical  line  examination,  $48.63 ;  another  case  of  the  examina- 
tion of  tracks.  $22.50. 

Mr.  Lord :  Are  those  bills  paid  by  the  applicant  to  the  parties  making 
the  examination,  or  is  the  cost  paid  through  this  office?  Do  you 
bill  the  applicant  for  cost  of  appraisal  and  then  pay  the  men  who 
made  the  appraisal? 

Mr.  Glasgow :     The  applicant  pays  direct. 

Mr.  Lord:  Tell  us  in  a  general  way  the  methods  employed  in  making 
the  appraisals. 

Mr.  Glasgow:  Of  course,  different  appraisers  have  different  theories. 
In  the  larger  cases,  or  in  the  applications  from  the  large  companies, 
the  question  of  intangible  value  has,  at  our  request,  not  been 
included  by  the  appraiser,  but  listed  and  we  have  been  allowed  to 
pass  upon  it.  The  appraiser  would  list  the  intangibles,  whether  a 
long  time  franchise  contract  with  a  certain  concern,  where  light  is 
furnished,  or  whatever  it  was.  He  would  give  the  actual  value  of 
the  physical  property;  the  value  of  merchandise,  etc.,  and  a  history 
of  the  industry  or  company  itself.  Then,  when  it  came  to  intangible 
values,  it  would  be  left  to  this  department  as  to  what  should  be 
allowed  for  them. 

Mr.  Lord :  When  you  get  a  statement  of  intangible  value,  what  do  you 
do  with  it  when  it  comes  here  ? 

Mr.  Glasgow:     As  a  rule,  we  allow  very  little  for  intangible  values. 


218 

Take,  for  instance,  a  telephone  company  in  a  territory  that  has  its 
connections  with  a  line  in  one  direction  and  a  line  in  another  direc- 
tion ;  if  it  is  connected  with  the  Bell  or  Automatic  for  long  distance 
services ;  that  serves  a  certain  territory  where  possibly  their  solicitor 
has  gone  out  and  spent  $1, 500.00  in  working  up  the  business,  explain- 
ing use,  etc. ;  or,  if  ;t  is  an  electric  plant,  going  out  to  people  having 
them  install  electricity  in  their  homes  for  different  purposes;  or 
going  to  some  plant  and  convincing  a  man  that  it  is  better  to  use 
electricity  than  his  steam  or  gasoline  engine.  When  that  electrical 
company  has  become  installed  and  got  ten  or  fifteen  hundred  ens 
tomers,  it  is  a  different  thing  than  when  they  start  and  don't  have 
any  business.  The  good  will  Of  that  business  is  worth  some  money. 
It  is  really  worth  whatever  it  cost. 

Mr.  Lord:  Would  it  be  safe,  however,  to  capitalize  that  good  will  for 
the  purpose  of  fixing  rates? 

Mr.  Glasgow:  Oh,  no  What  we  consider  when  fixing  rates  is  the 
physical  value. 

Mr.  Thompson:  What  rules  do  you  follow  as  to  depreciation,  reproduc- 
tion, etc.? 

Mr.  Glasgow:  If  it  is  a  plant. already  installed,  we  get  first  what  the 
plant  is  worth,  in  the  judgment  of  an  appraiser,  as  it  stands;  what 
it  would  cost  to  reproduce  now,  and,  if  it  has  been  built  for  several 
years,  we  get  the  depreciation.  We  consider  whether  it  has  run 
ten  years  and  been  allowed  to  run  down  rapidly,  or  whether  it  lias 
been  kept  up  to  85  or  90  per  cent  of  its  efficiency.  Ordinarily 
in  telephone  property  we  apply  a  depreciation  of  (>  per  cent  per 
year. 

Mr.  Thompson:     To  what  extent  do  you  consider  rights  of  way? 

Mr.  Glasgow:  Not  at  all,  unless  on  public  property,  because  we  assume 
that  any  fellow  could  get  it.  We  do  to  this  extent;  where  the 
applicant  has  been  to  the  expense  of  having  a  special  election  held, 
we  allow  them  that  expense. 

Mr.  Lord:  Don't  you  think  it  would  pay  the  state,  in  the  matter  of 
making  appraisals,  to  have  an  expert  engineer  in  its  service? 

Mr.  Glasgow:  I  have  always  contended  that.  You  go  to  any  state 
where  they  do  this  business  in  a  large  way,  like  New  York,  Wisconsin, 
Minnesota,  and  a  number  of  other  states  we  might  name,  and  they 
employ  their  own  engineering  force,  getting  a  good  deal  more  data 
and  more  reliable  information.  It  removes  the  man  from  any  possible 
relation  to  the  applicant  for  an  appraisal. 

Mr.  Lord:     Will  it  become  necessary  to  do  that  as  your  work  increases? 

Mr.  Glasgow :  I  think  it  will.  What  we  have  tried  to  do  at  two  sessions 
of  the  legislature  is  to  make  this  a  Public  Utility  Board. 

Mr.  Lord :  Would  you  endorse  a  recommendation  of  this  commission  if 
it  made  it  concerning  employment  by  the  state  of  an  engineer? 

Mr.  Glasgow :     I  certainly  would. 

I  think  this,  firstly,  that  instead  of  the  applicant  paying  the  outside 
engineer,  he  should  be  required  to  pay  the  state  for  the  services  and 
;t  would  be  self -sustaining ;  and  we  would  have  a  man  under  our 
control  at  all  times  for  any  kind  of  engineering  services  we  desired. 
The  department  has  a  man  under  the  head  of  "engineer"  very  well 
posted  on  the  physical  conditions  of  railroads  in  the  state.  He  has 
been  connected  with  this  department  for  about  eighteen  years  and 


219 

I  don't  believe  you  can  call  up  a  crossing  or  highway  of  the  state, 
or  any  railroad  in  Michigan,  that  has  been  viewed  by  this  department, 
or  where  any  protection  has  been  made,  that  he  couldn't  sit  in  his 
chair  and  describe  it  to  you;  but  he  is  not  in  a  position  to  go  out 
and  determine  the  safety  of  a  bridge. 

Appraisals — Statement  of  expense — 

St.  Joe  Power  Company,  on  first  appraisal f250.00 

Michigan  Gas  and  Electric  Light  Company 483.65 

Appraisal  of  Pere  Marquette  Railroad,  made  in  1914 : 
Payroll  for  month  of 

May $3,796.43 

June 7,963.88 

July 15,715.56 

August 20,848.31 

September   15,765.26 

October 9,685.92 

November 3,912.30 

December 1,814.54 

$79,502.20 

Detroit  United  Railway  Appraisal,  1914: 
Tangible  property- 
Payroll  preceding  month  of 

September $862.58 

September 6,154.84 

October . . . 12,981.11 

November  17,346.05 

December 21,270.94 

Further  item  of 1,975.84 

1915 :    Payroll  for 

January $21,643.20 

February 19,750.63 

March 16,813.60 

April    18,159.47 

May  6,961.43 

June 5,152.74 

July 3,282.79 

August   ." 3,074.27 

September 2,854.98 

October  2,754.34 

November  .  309.09 


Total  cost  for  appraisal  of  tangible  property $161,347.90 

Intangible  property:  1915 — 

Payroll  for 

April $912.29 

May   699.33 

June    997.29 

July 532.75 

August 266.90 

September    397.87 

October 486.99 

$4,293.42 

Total  cost  of  the  Detroit  United  Railway $165,641.32 


220 

Mr.  Glasgow:     The   matter   of   rates   of   all   kinds,   whether   railroad, 
express,  water-power  or  electric  light,  comes  to  myself,  and  all  claims 
originating  from  the  application  of  erroneous  rates,  differences  of  ; 
their  schedule  or  charges  come  to  me. 

Ther6  are  many  little  things  that  come  up  from  people  whom  we 
attempt  to  serve,  no  matter  whether  it  is  a  stale  or  interstate  matter. 
Fifteen  minutes  ago  I  had  a  call  from  an  electric  light  power  plant 
who  was  furnishing  power  to  a  steel  plant  for  the  manufacture  of  j 
government  war  material.  They  were  out  of  coal  and  had  sent  a 
representative  to  Chicago  to  see  if  they  could  get  some  and  finally 
found  they  could  get  coal  in  Chicago,  if  they  could  get  the  cars. 
They  asked  us  to  take  it  up  with  the  Michigan  Central  to  furnish 
cars  in  Chicago  for  bringing  the  coal  to  their  city,  and  we  did 
and  were  able  to  give  them  cars  in  Chicago  for  this  coal.  Also 
people  call  us  up  and  say  they  have  had  a  car  on  the  way  for  ten 
days  and  ask  us  to  see  what  we  can  do. 

Mr.  Lord :     So  that  you  are  really  a  clearing  house  for  various  purposes? 

Mr.  Glasgow:  Our  authority  in  the  adjustment  of  claims  is  in  the 
matter  of  erroneous  application  of  rates.  Generally,  this  is  caused 
by  some  local  agent  misinterpreting  his  tariff,  or  getting  the  figures 
from  the  wrong  line  on  the  schedule.  Claims  might  amount  from 
the  minimum  of  23  cents  to  $2,300.00,  according  to  the  shipment. 
They  come  to  us  just  as  quickly  for  |2.00  as  for  $200.00.  If  a  gentle- 
man in  Lansing  buys  a  ticket  to  Detroit  and  has  occasion  to  leave  the 
train  at  Ann  Arbor  or  Howell;  if  he  brings  the  unused  part^of  his 
ticket  to  us,  we  can  take  it  up  and  get  his  money  refunded. 

Mr.  Lord :  Can  you  tell  how  many  complaints  you  received  and  adjusted 
during  the  last  year? 

Mr.  Glasgow :     Ninety-four  claims  amounting  $3,971.22. 

Mr.  Glasgow :  We  have  a  number  of  calls  that  come  in  here  for  services 
and  to  avoid  the  expense  of  the  telephone,  we  endeavor  to  arrange 
the  matter  by  the  first  mail.  Quite  often  conditions  make  it  neces- 
sary for  us  to  telephone.  For  instance,  some  men  have  three  cars 
of  stock  loaded  ready  for  the  train  to  take  them  out,  and  through  the 
independence  on  the  part  of  the  train  crew,  they  go  by  and  don't 
take  them.  Cases  such  as  that  demand  our  immediate  attention. 

Mr.  Lord:  Outside  of  the  establishment  of  an  engineering  department 
here  under  vour  supervision,  in  what  other  manner  could  you 
increase  the  efficiency  of  your  department,  if  any? 

Mr.  Glasgow :  I  think  the  limitation  of  the  number  of  employes  should 
be  removed. 

Mr.  Lord :     What  is  the  statutory  limitation  in  the  matter  of  clerks  ? 

Mr.  Glasgow:     Not  to  exceed  five. 

Mr.  Lord:     When  was  that  law  enacted? 

Mr.  Glasgow:     Guess  it  has  always  been  that  way. 

Mr.  Lord:  Notwithstanding  the  increasing  activities  of  your  depart- 
ment, it  has  never  been  called  to  the  attention  of  the  legislature? 

Mr.  Glasgow:  It  was  sent  in  last  session,  but  unfortunately  it  was 
handed  to  a  man  who  gave  more  attention  to  other  things  than 
legislation,  and  it  did  not  reach  the  committee  in  time  to  have 
attention. 


221 

Mr.  Thompson :  What  do  you  think  of  the  graded  salary  law ;  how  does 
that  work  out? 

Mr.  Glasgow:  We  have  always  figured  that  that  pertained  to  people 
who  worked  in  the  capitol  and  not  here.  We  have  never  followed 
it  for  this  reason.  If  we  were  a  department  that  employed  a  large 
number  of  clerks  to  perform  what  clerical  service  was  needed/  it 
would  be  different.  But  we  find  this  condition  as  to  our  employes , 
if  we  have  a  statistician,  we  only  have  one ;  if  we  have  an  engineer, 
we  only  have  one ;  if  we  have  a  telephone  expert  at  the  head  of  our 
telephone  department,  we  have  to  pay  what  he  asks;  we  can't  get 
him  for  $800.00.  We  try  to  hold  ourselves  within  the  bounds  as  to 
stenographers.  We  commenced  paying  stenographers  $850.00  and 
soon  we  found  them  leaving  us ;  we  paid  them  $850.00  the  first  year, 
$950.00  the  second  year  and  $1,000.00  the  third  year.  Then  we  com- 
menced and  paid  them  $1,000.00  the  first  year,  $1,100.00  the  second 
year  and  $1,200.00  the  third  year.  We  have  to  have  better  stenog- 
raphers than  the  average;  we  have  to  have  stenographers  who  can 
take  a  hearing.  They  really  have  to  be  better  than  court  reporters, 
because  three  people  are  liable  to  talk  in  three  different  languages 
at  one  time.  We  find  people  appear  before  us,  when  they  see  a  stenog- 
rapher taking  dictation,  who  will  go  to  that  stenographer  and  ask 
her  how  much  she  is  getting,  and  say  "come  with  me,  and  I  will  give 
you  $1,400.00."  We  have  lost  two  to  the  Gier  Pressed  Steel  Company, 
one  man  to  the  Prosecuting  Attorney's  office  in  Wayne  County,  one 
man  to  the  stenographic  force  in  Grand  Rapids,  and  in  every  instance 
it  has  been  because  commercial  and  industrial  people  have  outbid  us. 
They  take  them  from  us  on  all  sides.  We  can't  go  down  to  the 
$800.00  proposition,  as  almost  everybody  in  the  department  has  to 
be  an  expert  in  their  line.  We  have  not  a  person  in  the  department 
working  for  less  than  $1,000.00,  except  a  new  stenographer  that  we 
put  on  two  weeks  ago. 

Mr.  Lord :  Will  you  tell  us  next  about  what  you  think  would  be  the 
ideal  way  for.  the  handling  of  public  utilities  from  the  standpoint 
of  state  supervision? 

Mr.  Glasgow :  My  opinion  expressed  in  answering  your  question  would 
undoubtedly  bring  me  in  conflict  with  a  great  many  people,  because 
I  am  not  a  believer  in  home  rule  at  all.  If  the  state  board  is  going 
to  have  control  over  utilities  operating  outside  of  municipalities,  I 
believe  the  state  should  have  control  over  municipally  owned  plants. 
If  the  city  of  Detroit,  or  any  other  city,  is  going  to  assume  the  right 
to  control,  net  only  their  own  municipal  plant,  but  any  privately 
owned  plant  operating  in  the  city,  the  privately  owned  plant  is  going 
to  be  the  loser.  They  can  exercise  control  over  a  plant  within  the 
limits  of  the  city,  yet  the  privately  owned  plant  operates  in  territory 
outside  of  the  city;  for  instance,  the  Michigan  Railway  Company. 
If  the  state  had  had  control  of  the  city  street  car  plant  in  Detroit,  its 
troubles  would  have  been  settled  long  ago.  If  Detroit  is  going  to 
say  what  a  telephone  company  shall  charge,  Ann  Arbor  shall  charge 
a  different  rate,  and  Jackson  may  fix  rates  in  Jackson,  you  will  have 
at  once  a  lack  of  uniformity  in  service  caused  by  placing  the  control 
in  the  hands  of  the  municipal  authorities.  Any  enterprise,  even 
though  purely  local,  can  be  regulated  and  its  rights  determined  as 


222 

to  its  reasonableness  in  the  service  of  the  local  people,  more  properly 
and  fairly  by  disinterested  authority  than  by  conflict  of  local  and 
interested  authority.  There  is  no  local  enterprise  but  what  gets  and 
demands  certain  concessions  and  rights.  It  may  observe  a  certain 
condition  in  one  portion  of  the  city,  in  compliance  with  a  request  of 
an  alderman  from  that  district,  and  may  not  be  in  position  to  make 
the  same  concessions  to  some  other  alderman  in  another  part  of 
the  city,  and  the  cat-hauling  that  goes  on  in  the  control  of  utilities 
is  the  very  element  that  places  them  under  the  control  of  local 
authorities. 

Mr.  Lord:  In  regard  to  this  Public  Utilities  Commission;  would  you 
have  such  a  commission  in  place  of  the  Railroad  Commission  ? 

Mr.  Glasgow :  Well,  it  would  take  more  men  with  the  utilities  all  under 
our  supervision. 

Mr.  Lord :     How  wide  a  scope  would  you  give  it  ? 

Mr.  Glasgow :  Have  it  take  in  everything,  the  same  as  Wisconsin,  New 
York,  and  other  states.  Everything  of  that  character  that  serves 
the  public. 

Mr.  Lord:  How  about  steamboat  companies  running  between  home 
shores  ? 

Mr.  Glasgow :  I  had  occasion  to  write  a  letter  on  that  question  a  short 
time  ago.  It  was  regarding  the  proper  rates  to  apply  to  handling 
of  freight  between  certain  points,  and  I  had  to  say  that  we  did 
not  have  jurisdiction  in  Michigan.  We  have  no  regular  intra- 
state  water  service.  Our  law  says  we  shall  have  jurisdiction  on 
rail  and  part  by  water,  but  we  have  no  such  jurisdiction.  We  have 
tried  to  exercise  control  over  the  rates  on  shipments  by  water  between 
points  in  Michigan,  but  they  avoid  coming  under  our  jurisdiction  by 
refusing  to  issue  a  through  bill  of  lading.  If  they  did  issue  a  bill  of 
lading  clear  through,  they  would  be  under  our  control;  they  make 
the  local  rate  rather  than  the  through  rate.  There  are  shipments 
taken  by  water,  largely  from  Detroit,  Port  Huron,  Bay  City,  Macki- 
nac  and  Saginaw.  Somebody  ought  to  have  some  jurisdiction  over 
the  water  rates  between  points  in  Michigan. 

Mr.  Lord:  You  couldn't  get  state  supervision  over  local  utilities  with- 
out an  amendment  to  the  constitution,  could  you  ? 

Mr.  Glasgow :  In  the  last  bill  submitted  to  the  legislature,  to  create  a 
Public  Utilities  Commission,  that  was  the  great  issue,  and  I  don't 
recall  in  that  particular  instance  that  it  specifically  referred  to  any 
constitutional  amendment.  The  fight  before  the  committee  was  that 
the  bill  as  drawn  would  place  the  control  of  all  utilities  in  the  hands 
of  the  commission.  At  the  same  time,  Mr.  Groesbeck,  who  drew  the 
bill,  was  not  in  favor  of  it. 

Mr.  Thompson  :  How  large  would  your  ideal  Public  Service  Commission 
be  in  order  to  handle  the  problems  in  Michigan? 

Mr.  Glasgow:  Well,  when  this  last  bill  was  considered,  the  Governor 
wanted  five  members.  We  recommended  not  to  exceed  three,  at  least 
just  three  for  two  years ;  first,  because  it  would  take  the  larger  por- 
tion of  that  time  to  reconstruct  the  entire  department,  get  it  in 
working  condition,  and  for  the  general  public  to  find  out  we  had 
supervision ;  second,  that  it  would  demonstrate  the  necessity  of  more 
commissioners.  We  take  the  position  that  you  can  hire  a  better 


223 

man  than  you  can  appoint.  Supposing  we  wanted  five  commissioners 
and  wanted  one  of  them  to  be  at  the  head  of  the  Engineering  Depart- 
ment ;  we  believe  you  could  hire  a  better  man  for  that  position  than 
you  could  appoint.  Also,  it  is  easier  for  one  man  to  agree  than  for 
three,  and  easier  for  three  men  to  agree  than  five.  You  are  liable  to 
have  five  opinions  on  the  same  subject. 

Mr.  Lord :  Don't  you  think  where  a  public  service  corporation  makes 
application  to  this  commission  to  issue  bonds,  necessitating  investi- 
gation on  the  part  of  the  commission,  that  the  corporation  should 
be  obliged  to  pay  something  to  the  state  for  this  service  ? 

Mr.  Glasgow:  I  have  never  given  the  matter  sufficient  study  to  kno\v 
what  the  arguments  would  be  for  or  against  it. 

Mr.  Lord :  Would  a  charge  of  this  kind  add  to  the  burden  of  the  public 
by  way  of  increase  in  rates  ? 

Mr.  Glasgow :  A  charge  of  that  character  would  be  so  slight  that,  after 
a  number  of  years  of  service,  the  charges  would  be  entirely  lost. 
Supposing,  for  instance,  that  when  such  a  company  is  incorporated, 
it  costs  them  f  1.00  a  thousand,  and  they  were  incorporated  for 
1500,000.00.  When  you  spread  that  |500,000.00,  say  over  the  charge 
which  would  be  made  to  the  customers  served  by  that  company,  for 
the  full  length  of  time  for  which  the  security  shall  run,  it  would  not 
be  one-tenth  of  a  mill  to  the  taxpayer. 

Mr.  Thompson :  If  such  a  charge  was  in  force,  the  rates  of  one-tenth  of 
one  per  cent,  during  1917,  how  much  would  it  have  netted  the  state? 

Mr.  Glasgow :     A  nice  bunch  of  money. 

The  securities,  stocks,  bonds,  notes  and  other  evidence  of  indebtedness 
authorized  by  the  Michigan  Railroad  Commission,  for  period  from 
January  1st,  1916,  to  July  1st,  1917,  was  $269,929,226.00 ;  from 
January  1st,  1917,  to  July  1st,  1917,  was  f 226,194,505.00. 

Mr.  Thompson  :  What  conflict  would  there  be  between  your  department 
and  the  Securities  Commission  in  making  such  a  charge? 

Mr.  Glasgow:  There  ought  not  to  be  any.  It  would  be  very  proper  if 
they  would  make  the  same  charge. 

Mr.  Thompson:     What  are  the  arguments  in  favor  of  a  double  charge? 

Mr.  Glasgow :     They  don't  pass  on  the  same  securities  as  we  do. 

Mr.  Thompson:  Ought  there  to  be  a  single  board  passing  on  all  those 
securities ;  in  other  words,  ought  the  Securities  Commission  and  the 
Railroad  Commission  to  work  together? 

Mr.  Glasgow :  I  have  not  given  it  any  consideration  at  all,  and  possibly, 
in  view  of  the  fact  of  their  being  separate  boards,  it  might  be  a 
rather  delicate  thing  to  express  an  opinion  on  at  this  stage  of  the 
game.  I  do  think  that  the  consolidation  of  boards,  where  it  reduces 
expense  and  does  not  lessen  efficiency,  is  to  be  commended. 
In  making  up  a  list  of  those  things,  which  in  the  aggregate  represent 
the  expense  of  incorporations  and  launching  of  a  new  business,  there 
appear  items  which  would  be  as  large  as  any  fee  which  might  be 
charged  by  the  state  for  granting  authority  to  issue  securities,  in 
the  form  of  incidentals,  legal  expense,  etc.,  which  are  not  actual,  but 
which,  as  a  matter  of  custom,  seem  to  have  been  allowed.  So  that  if 
the  small  fee  which  the- state  should  charge  was  considered,  it  cer- 
tainly couldn't  be  looked  upon  as  a  burden  while  all  these  other  like 


224 

charges  are  being  allowed.  I  question  that  the  corporations  would 
offer  much  of  any  objection  to  paying  a  small  fee. 

Mr.  Thompson:  And  you  think  one-tenth  of  one  per  cent  would  be  a 
reasonable  fee? 

Mr.  Glasgow:  I  couldn't  speak  from  experience,  of  course;  I  haven't 
given  it  any  thought.  The  Securities  Commission  has  been  trying  it 
out.  It  is  possible  there  ought  to  be  a  graded  charge.  If  a  company 
is  organized  for  f  100,000.00,  they  are  quite  liable  to  ask  to  have  issued 
a  very  large  proportion  of  that  amount,  whereas  a  company  whose 
activities  are  expected  to  continue  indefinitely,  oftentimes  is  capi- 
talized for  $1.000,000.00,  but  don't  wish  to  exceed,  for  a  number  of 
years,  two,  three  or  four  thousand  dollars. 

Mr.  Thompson:  You  spoke  this  morning  about  i\  tax  derived  from 
water-power. 

Mr.  Glasgow:  Of  course,  they  might  raise  an  objection  to  that  by  saying 
that  the  general  tax  they  pay  is  heavy  enough,  but,  on  the  other 
hand,  no  corporation  should  be  permitted  to  step  in  and  utilize  the 
natural  benefits  derived  from  the  streams  simply  by  paying  taxes 
on  the  physical  value  they  have  put  into  it.  There  is  a  natural  ele- 
ment there  that  thev  naver  created. 

Mr.  Thompson:  Would  such  a  charge  as  you  outline  be  an  added  burden 
to  the  public?  Could  not  the  same  end  be  attained  for  the  public 
by  reduction  and  regulation  of  rates? 

Mr.  Glasgow :  You  might  if  you  were  going  to  tax  them  on  the  number 
of  kilowatts  produced  and  sold.  The  difficulty  would  be  that  any 
charge  in  the  rates  would  be  so  much  greater  than  a  reasonable  tax. 
The  tax  would  be  so  small  it  would  be  borne  by  the  producer  rather 
than  the  consumer. 

Mr.  Thompson :  What  % classes  of  business  operations  ought  to  be 
included  in  public  utilities  ? 

Mr.  Glasgow:  Everything  not  purely  private  in  character.  Railroad 
systems,  express  systems,  telephone  and  telegraph  lines,  gas  plants, 
electric  light  plants,  water  transportation  companies,  street-railways, 
power  companies,  heating  and  lighting  companies,  transportation 
companies  of  all  kinds,  including  jitneys,  dray  lines,  taxi  lines,  etc. 

Mr.  Thompson:  All  public  transportation,  all  means  of  communication 
and  all  public  transfers  of  power,  heating  or  light. 

Mr.  Lord:     Have  you  an  efficient  office  force? 

Mr.  Glasgow:     Yes,  sir. 

Mr.  Lord:  Does  your  work  here  in  this  department  bear  any  relation- 
ship whatever  to  work  being  done  in  any  other  department  of  the 
state  government? 

Mr.  Glasgow:     None  whatever. 

Mr.  Lord:     No  duplication  of  efforts? 

Mr.  Glasgow :     No,  sir. 

Mr.  Lord :  The  only  place  from  whom  you  get  help  is  the  Tax  Commis- 
sion, occasionally? 

Mr.  Glasgow :  Occasionally  we  call  them  to  ascertain  what  property 
has  been  assessed  at  or  to  verify  figures  we  have. 


226 

INDUSTRIAL  ACCIDENT  BOARD 

Mr.  Lord:  Mr.  Smith,  as  Chairman  of  the  Industrial  Accident  Board, 
will  you  state  in  a  general  way  to  the  Budget  Commission  what  the 
various  activities  of  the  board  are? 

Mr.  Smith :  The  board  is  organized  for  the  purpose  of  carrying  out  the 
provisions  of  Act  10  of  the  Public  Acts  of  the  First  Extra  Session  of 
1912,  commonly  called  the  "Workmen's  Compensation  Law."  Under 
that  law,  there  are  about  twenty  thousand  private  employers  of 
labor  who  have  accepted  the  act  by  filing  their  acceptances.  I  think 
that  I  might  state  here  that  every  private  employer  of  labor  must 
accept  the  act  by  a  statement  in  writing,  that  all  those  private 
employers  of  labor  must  insure  in  an  insurance  company,  approved 
by  the  Industrial  Accident  Board,  unless  the  board  sees  fit  to  give 
them  the  right  to  carry  their  own  risk  and  that  is  done  only  when 
they  are  considered  sufficiently  financially  strong  by  the  board. 
There  are  about  forty-five  insurance  companies  that  have  been 
authorized  by  the  department  in  Michigan  to  write  workmen's  com- 
pensation. Whenever  an  employer  accepts  the  act,  the  board  must 
see  to  it  that  he  procures  insurance.  We  have  what  is  called  an 
"insurance  and  acceptance"  department,  or,  more  properly  speaking, 
an  "acceptance  and  insurance"  department.  In  that  department  we 
keep  a  record  of  the  acceptance  of  every  employer  and  a  record  of 
the  insurance  he  carries  from  year  to  year.  We  have  to  do  that, 
and  we  have  to  Save  that  record  accurate,  because  when  any  employe 
is  injured,  the  board  must  be  able  to  tell  the  employe  the  name  of 
the  insurance  company  that  his  employer  is  insured  with.  The 
"acceptance  and  insurance"  department  takes  all  of  the  time  of 
three  persons  and  really  the  three  persons  are  not  able  to  do  all  of 
the  work  and  keep  it  up.  I  might  say  in  that  connection,  and  here  is 
something  that  I  believe  you  gentlemen  will  appreciate,  that  some 
employers  have  been  claiming  that  they  could  accept  the  act  in  part 
and  reject  it  in  part,  and  that  they  could  come  under  the  act  for 
part  of  their  activities  and  stay  out  for  the  rest  of  their  activities,  and 
some  insurance  companies  have  been  claiming  that  they  could  insure 
a  portion  of  the  business  of  the  employer.  Just  at  the  present  time 
the  board  is  troubled  considerably  with  those  propositions.  There 
have  been  two  decisions  of  the  Supreme  Court  in  regard  to  this  and 
an  important  case  is  now  pending  on  that  proposition.  If  it  is  found 
that  this  can  be  done,  it  will  be  pretty  nearly  impossible  to  carry 
out  the  provisions  of  the  Workmen's  Compensation  Law,  and  instead 
of  three  in  the  acceptance  and  insurance  department,  we  will  need 
twelve. 

In  addition  to  the  private  employers  of  labor,  there  are  about  ten 
thousand  public  employers  of  labor,  consisting  of  fifty-nine  or  sixty 
state  departments  and  institutions,  some  eighty  odd  counties,  some 
one  hundred  and  twenty-five  cities  or  thereabouts,  three  hundred  and 
thirty-five  villages  or  thereabouts,  and  some  seventy-five  hundred 
school  districts  or  thereabouts.  The  last  legislature  changed  the 
law  somewhat,  and  it  became  necessary  for  the  board  to  write  to 
every  employer  in  Michigan,  both  public  and  private,  which  it  did, 
except  only  that  we  did  not  write  to  country  school  districts.  We 


226 

thought  that,  judging  from  the  past,  we  had  had  so  few  accidents  in 
those  districts,  that  it  was  unnecessary  to  go  to  the  expense  of 
writing  to  every  district.  We  wrote  to  all  others — some  twenty-five 
thousand  letters — and  sent  them  all  a  copy  of  the  law,  rules  of  the 
board  and  a  lot  of  blanks  for  them  to  comply  with  the  law  on.  The 
law  requires  all  of  those  thirty-thousand  employers  of  labor  to  report 
to  the  Industrial  Board  any  accident  that  happens  to  any  of  their 
employes,  no  matter  how  trivial  in  its  character  the  accident  may 
seem  to  be.  In  1916  about  forty-six  thousand  accidents  were  reported 
by  employers  of  labor  to  the  board. 

Mr.  Lord:  Let  me  ask  a  question  right  here,  Mr.  Smith.  What  disposi- 
tion do  you  make  of  these  accidents  reported  when  they  come  in? 

Mr.  Smith:  In  that  connection,  I  will  say  that  of  these  forty-six  thou- 
sand, about  nineteen  thousand  six  hundred,  as  I  recall,  were  com- 
pensable accidents.  Some  twenty-six  thousand  were  non-compensable. 
In  case  of  non-compensable  accidents,  nothing  remains  to  be  done 
as  soon  as  the  board  is  satisfied  that  it  is  a  non-compensable  accident. 
In  case  of  the  nearly  twenty  thousand  compensable  accidents,  the 
usual  amount  of  correspondence  is  necessary.  Of  course,  it  is  the 
duty  of  the  employer  or  insurer,  as  these  reports  come  in,  to  comply 
with  the  law  by  filing  an  agreement  setting  up  +he  man's  wages, 
what  he  is  entitled  to  and  agreeing  to  pay  one-half  of  his  wages 
during  his  disability  or,  for  the  cutting  off  of  his  finger  or  the 
knocking  out  of  an  eye,  or  whatever  the  accident  may  be.  In  a  good 
many  of  the  twenty  thousand  accidents,  correspondence  was  neces- 
sary in  order  to  get  their  agreement  correct;  it  very  frequently 
comes  in  wrong. 

Mr.  Lord:  You  have  to  write  for  corrections.  That  constitutes  your 
principal  correspondence,  does  it? 

Mr.  Smith :  The  correspondence  relating  to  all  these  accidents  does 
constitute  the  bulk  of  it.  I  might  say  that  at  the  end  of  191(5  the 
number  of  private  employers  under  the  act  was  eighteen  thousand 
six  hundred  and  forty-seven.  We  have  more  now — about  twenty 
thousand — I  believe ;  that  at  the  close  of  1916,  according  to  the  best 
information  we  could  obtain,  there  were  seven  hundred  thirty-nine 
thousand,  four  hundred  and  thirty-six  employes  who  were  working 
for  employers  who  were  under  the  act.  The  exact  number  of  acci- 
dents reported,  to  which  I  referred,  is  forty-six  thousand  five  hundred 
and  two;  of  those  forty-six  thousand  five  hundred  and  two  accidents, 
three  hundred  and  eighty-nine  were  fatal  accidents,  a  little  over  a 
death  a  day;  of  those  accidents,  seventeen  hundred  and  thirteen 
resulted  in  permanent  partial  disability ;  of  those  accidents,  sixteen 
thousand  nine  hundred  and  sixty-one  resulted  in  temporary  total 
disability.  The  exact  number  of  compensable  accidents  I  find  was 
nineteen  hundred  and  sixty-three.  The  total  number  of  cases  com- 
pleted and  filed  away  last  year  was  fifteen  thousand  seven  hundred 
and  forty-five.  The  total  number  of  claims  which  were  executed  and 
"approved  last  year  was  seventeen  thousand  five  hundred  and  sixty- 
three.  The  total  amount  of  compensation  paid  in  current  and  com- 
pleted cases  as  per  our  record  last  year  was  $1,723,617.73. 

Mr.  Lord:     Was  that  paid  voluntarily  by  the  employer? 

Mr.  Smith :     No,  that  compensation  was  paid  partially  under  agreements 


227 

made  voluntarily,  partially  as  a  result  of  arbitration  in  disputed 
cases.  In  all  cases,  gentlemen,  where  agreements  are  not  entered 
into  by  the  parties  through  correspondence,  when  we  reach  the  point 
that  we  cannot  get  an  agreement,  then  either  the  injured  employe, 
the  employer  or  the  insurer  files  what  is  called  "notice  and  applica- 
tion for  adjustment  of  claim."  When  that  application  for  adjust- 
ment is  filed,  the  other  party  must  be  notified,  under  the  rules  of  the 
board,  and  the  case  set  for  arbitration.  The  law  requires  that  the 
arbitration  must  be  held  in  the  locality  where  the  injury  occurred. 
Last  year  there  were  three  hundred  and  sixty-three  applications  for 
arbitration,  where  agreements  could  not  be  entered  into.  Of  those 
three  hundred  and  sixty-three  applications,  there  were  three  hundred 
and  eleven  hearings  actually  held.  Those  are  held  by  the  two  deputy 
commissioners,  and  by  the  members  of  the  board — mostly  by  the 
deputies — but  by  the  members  of  the  board  when  they  get  time  or 
when  the  deputies  are  unable  to  go.  Of  the  three  hundred  and 
eleven  cases — and  I  may  say  that  they  are  practically  a  law-suit — 
most  of  them  take  half  a  day — in  order  that  the  warrant  on  arbitra- 
tion may  be  any  good  and  that  the  Supreme  Court  may  not  set  it 
aside,  each  party  must  be  fully  notified  in  order  that  he  may  bring  his 
witnesses,  etc.  These  three  hundred  and  eleven  cases  were  tried  in 
that  way  and  out  of  the  three  hundred  and  eleven,  the  injured 
employe  was  entitled  to  compensation,  and  so  found,  in  one  hundred 
and  eighty-two.  In  one  hundred  and  nineteen  of  the  cases,  it  was 
found  that  the  injured  employe  had  no  just  claim,  and  he  was  denied 
compensation. 

Mr.  Lord:  You  say  "committee  on  arbitration" — does  that  consist  of 
somebody  besides  the  deputies? 

Mr.  Smith:  The  law  requires  that  at  the  hearing,  the  case  shall  be 
heard  by  a  member  of  the  board  or  a  deputy  commissioner,  and  also 
that  each  party  shall  appoint  an  arbitrator.  The  applicant  appoints 
one  man  and  the  employer  another  man,  and  these  three  form  the 
board.  These  arbitrators  must  be  paid  by  the  state — the  law  says 
|5.00  a  day.  We,  I  am  frank  to  say,  have  been  paying  them  $2.50 
a  session,  even  though  more  than  a  half  a  day,  we  have  paid  them 
|2.50,  and  if  it  requires  all  day  we  pay  them  |5.00.  I  will  say  to 
you  that  in  practice  the  arbitrators  do  not  cut  much  of  a  figure.  The 
deputy  is  generally  the  only  man  who  knows  the  law. 

Mr.  Lord:     Suppose  the  arbitrators  don't  agree,  then  what? 

Mr.  Smith:  Two  of  them  must  agree,  because  there  are  only  three,  and, 
if  two  agree  they  make  the  decision  and  the  other  man  makes  his 
dissent  upon  it. 

Mr.  Lord:     Are  the  witnesses  paid  by  the  state? 

Mr.  Smith :  The  witnesses  are  not  paid  by  the  state  and  it  is  a  serious 
question  in  the  minds  of  the  board,  where  the  state  is  paying  all  the 
expenses  of  arbitration,  whether  or  not  it  could  be  made  to  pay 
under  the  law.  We  have  construed  it  to  mean  that  they  shall  pay  only 
the  arbitrators.  Of  these  three  hundred  and  eleven  law-suits,  some 
are  $3,000.00  cases,  some  |2,500.00  and  some  $4,000.00  cases.  Some- 
times the  employe  may  not  have  an  attorney — probably  the  insurer 
and  employer  would.  When  the  injured  employe  does  not  have  an 


attorney,  the  Chairman  of  the  arbitration  committee  examines  wit- 
nesses, if  necessary. 

Mr.  Lord:  Where  does  the  money  come  from  to  meet  the  expenses  of 
arbitration  that  you  pay? 

Mr.  Smith:  The  arbitrators  are  paid  out  of  the  appropriation  of  the 
Industrial  Accident  Board.  The  deputies  are  also  paid  out  of  that, 
the  only  other  expenses  would  be  witness  fees,  I  take  it.  Our  expenses 
come  from  a  state  appropriation.  We  were  given  this  year  and  next 
year  f 70,000.00  from  the  state.  This  $70,00u'.00  is  plain  contribution 
for  carrying  out  of  the  act.  We  do  not  turn  in  any  money  to  the 
state  from  fees. 

Mr.  Lord:     So  that  employers  of  labor  do  not  contribute  anything? 

Mr.  Smith:     No,  sir;  only  their  proportion  of  expenses  and  taxes. 

Mr.  Lord :     What  benefit  is  this  work  to  the  state  as  a  whole  ? 

Mr.  Smith:  I  believe  it  is  a  great  benefit  in  that  hundreds  of  damage 
cases  of  employes  against  their  employers  were  in  the  courts  prior 
to  the  enactment  of  this  law.  There  are  not  many  more  damage 
cases  of  any  importance,  because  nearly  all  employers  now  come 
under  this  act. 

Mr.  Smith:  What  I  was  going  to  say  is  this:  I  believe  that  every 
employer  should  be  made  to  increase,  to  some  extent,  the  compensa- 
tion that  is  now  paid  to  the  injured  employe.  I  think  that  instead 
of  taking  care  of  a  man  who  is  injured  for  three  weeks,  they  ought 
to  take  care  of  him  for  three  months,  if  necessary.  I  would  say 
further  that  instead  of  making  a  poor  injured  employe  wait  for 
fourteen  days  before  the  compensation  starts,  that  it  should  start  at 
the  end  of  seven  days. 

Mr.  Lord :     Why  shouldn't  it  begin  at  the  time  of  action  ? 

Mr.  Smith:  It  was  alleged  when  workmen's  compensation  law  was 
being  discussed,  that  if  the  employe  drew  compensation  immediately 
upon  being  hurt,  he  would  magnify  his  injury,  that  little  accidents 
lasting  only  one,  two  or  three  days,  would  be  made  to  seem  more 
serious,  and  that  something  should  be  in  the  law  to  make  the 
employe  be  more  careful  himself,  and  if  he  was  slightly  injured,  a 
little  of  the  burden  should  fall  on  him. 

Mr.  Thompson :  As  I  understand  your  efforts  here,  they  are  as  follows : 
First,  to  determine  your  rules  of  operation ; 

Second,  work  out  methods  of  acceptance  by  the  employer  of  the  law ; 
Third,  to  determine  the  question  of  carrying  the  risk  which  involves 
investigation  and  licensing  of  companies,  the  administration  of  the 
industrial  fund  and  the  determination  of  whether  or  not  the  employer 
is  justly  able  to  carry  risks  himself ; 
Fourth,  question  of  determination  and  disposition  of  accidents. 

Mr.  Smith:  I  might  say  to  you  that  we  have  nothing  to  do  with  the 
State  Industrial  Accident  fund.  In  a  general  way  you  have  stated 
our  efforts. 

I  think  at  this  point  it  would  be  a  good  place  to  state  that  last  year, 
out  of  three  hundred  and  eleven  arbitration  hearings,  application 
was  made  to  appeal  one  hundred  and  ten  of  them. 

Mr.  Lord  :     Where  is  that  appeal  made  ? 

Mr.  Smith:  To  the  full  board.  All  those  one  hundred  and  ten  were 
heard  and  enough  others  pending  to  number  one  hundred  and  thirty 


229 

for  the  year.  When  these  cases  are  appealed,  all  the  testimony  taken 
before  the  arbitrators  is  set  up  in  the  appeal. 

Mr.  Lord:     Who  pays  the  expense  of  the  appeal? 

Mr.  Smith :  The  party  who  appeals,  and  I  might  say  that  in  eight  cases 
out  of  ten,  it  is  the  employers  and  insurance  companies.  If  the 
employe  is  beaten,  he  is  usually  too  poor  to  appeal. 

Mr.  Lord:  Do  you  think  that  they  lose  any  appeals  because  they  are 
financially  unable  to  carry  them  up  ? 

Mr.  Smith :  I  doubt  it  very  much,  for  the  deputies  and  members  of  the 
board  are  very  careful,  or  try  to  be,  to  see  that  the  employe  gets  an 
opportunity  to  present  his  case  on  its  merits,  or  on  facts. 

Mr.  Lord:  He  has  to  present  it  in  person,  while  the  employer  presents 
it  through  an  attorney. 

Mr.  Kennedy:  Most  of  the  lawyers  representing  employers  of  labor 
say  that  they  would  rather  run  up  against  a  lawyer  representing  an 
employe  than  members  of  the  board. 

Mr.  Lord:     Does  the  deputy  or  member  represent  the  laboring  man? 

Mr.  Smith :  The  deputy  represents  the  state.  If,  in  his  judgment,  it  is 
necessary  for  that  injured  man  to  get  in  any  other  witnesses,  he  tells 
him  so.  The  deputy  or  member  seeks  to  get  the  truth  and,  if  neces- 
sary, he  adjourns  the  hearing  to  get  the  truth,  and  asks  the  parties 
te  bring  in  witnesses.  I  do  not  believe  that  the  deputy  or  member 
closes  a  hearing  without  feeling  assured — he  may  be  wrong  about 
it — that  the  employe  has  had  an  opportunity  to  present  all  the  truth 
of  the  case  and  the  deputy  will  aid  him  in  doing  so. 

Mr.  Lord:     Is  he  cross-examined? 

Mr.  Smith :  Where  the  injured  employe  has  no  attorney,  the  deputy  or 
member  of  the  board  examines  him  and  asks  him  for  the  facts,  and 
then  permits  the  attorney  on  the  other  side,  if  he  likes,  to  cross- 
examine  him.  The  deputy  always  examines  the  witnesses  produced 
by  the  respondent.  They  are  empowered  to  make  any  investigations 
that  they  deem  necessary.  That  is  a  pretty  broad  power.  I  might 
call  your  attention  to  the  fact  that  Section  8  of  Part  3  provides  that 
the  committee  of  arbitration  shall  make  such  inquiries  and  investiga- 
tions as  they  deem  necessary.  I  might  say  as  to  these  arbitrations, 
that  the  board  insists  that  these  deputy  commissioners  shall  make 
a  detailed  finding  and  statement  of  the  facts  of  every  case  to  the 
board.  Mr.  Zierleyn  and  Mr.  Keeves  are  the  two  deputies.  At  night, 
when  they  have  finished  an  arbitration,  if  they  have  time,  they  write 
out  in  longhand  a  statement  of  facts  of  that  case,  brief  of  testimony. 
This  is  not  required  by  law,  only  by  the  board.  Sometimes  they 
don't  get  an  opportunity  to  write  it  all  out  and  can  only  make 
memoranda  and,  when  they  get  into  the  office,  they  get  it  in  shape 
for  their  report.  These  three  men  held  three  hundred  and  eleven 
hearings  and  they  were  just  like  three  hundred  and  eleven  law-suits. 
And  we  require  that  they  shall  make  their  findings,  together  with 
the  three  hundred  and  eleven  hearings,  on  the  two  hundred  and 
eighty-two  conferences. 

Mr.  Lord :  Are  appeals  from  your  decisions  to  the  Supreme  Court  made 
largely  by  employe  or  by  employer? 

Mr.  Smith:     Employer. 

Mr.  Lord:  Isn't  it  a  fact  that  the  employer  is  the  one  that  fights  the 
decision  of  the  board  to  a  large  extent? 


230 

Mr.  Smith:  Perhaps.  He  thinks  that  the  board  is  inclined  to  look 
after  the  employe.  The  Supreme  Court  has  decided  ninety-six  cases 
on  appeal  from  the  final  order  of  this  board.  Of  those  ninety-six,  my 
recollection  is  that  ninety-one  of  them  were  appealed  by  the  employer 
or  insurance  company,  and  that  five  of  them  were  appealed  by  the 
employe.  This  mav  not  be  exact,  but  it  is  pretty  close. 

Mr.  Lord:  In  how  many  of  the  cases  appealed  to  the  Supreme  Court 
was  the  decision  of  the  full  board  sustained? 

Mr.  Smith:  At  a  rough  guess,  I  would  say  that  out  of  ninety-six — this 
is  a  guess — probably  fifty-five,  not  far  from  half  and  half. 

Mr.  Tompkins:  You  say  that  you  arrange  your  conferences  by  bundles 
in  order  to  save  money  for  the  state.  In  the  meantime,  what  is  the 
injured  employe  doing  for  compensation? 

Mr.  Smith:  Possibly  I  should  correct  my  statement  by  saying  that  we 
round  up  these  conferences,  but  that  is  limited  to  the  fact  that  we 
endeavor  to  get  to  the  man  as  quickly  as  we  can.  It  may  be  that  he 
has  to  wait  a  little  longer  than  he  should.  If  we  see  that  he  is  not 
going  to  be  reached  in  the  proper  time,  we  go  to  a  little  extra  trouble 
or  possibly  expense. 

Mr.  Lord:  Getting  back  to  the  disadvantage  of  the  employe  in  the 
matter  of  hearings  on  appeal,  we  will  take  for  illustration  a  case 
where  a  man  living  in  the  Upper  Peninsula  is  killed.  He  is  a  poor 
man  and  leaves  a  wife  and  large  family.  The  employer  of  that  man 
appeals  from  the  decision  of  the  arbitration  board  to  the  full  board 
in  Lansing.  How  is  it  possible  for  that  widow  to  be  represented 
here  as  she  ought  to  be,  under  this  law?  Cases  are  appealed  and,  in 
cases  such  as  I  cite,  the  employer  would  send  his  attorney  down  here 
and  fight  it  hard,  of  course.  That  poor  widow  has  no  means  to 
enable  her  to  hire  an  attorney  or  anybody  else,  and  couldn't  come 
down  here  herself. 

Mr.  Smith :  If  the  facts  were  actually  brought  out  in  the  testimony 
before  the  arbitration  board,  the  Accident  Board  will  see  to  it  that 
she  gets  just  as  good  protection  under  the  law  as  if  she  had  six 
attorneys. 

Mr.  Lord:  Isn't  it  a  fact  that  you  hear  only  one  side  on  appeal  here? 
Isn't  it  a  fact  that  the  board  works  under  a  disadvantage  because 
of  it? 

Mr.  Smith:     To  a  certain  extent,  that  might  be  so. 

Mr.  Lord :  And,  because  of  this  fact,  isn't  there  a  danger  of  an  employe 
not  getting  a  proper  settlement? 

Mr.  Smith:     No,  I  don't  think  so,  Mr.  Lord. 

Mr.  Lord:  The  point  I  want  to  bring  out  is  that  this  widow  should  be 
properly  represented  before  this  board  on  appeal,  and  that  the 
employer  of  labor  should  not  have  it  all  his  own  way. 

Mr.  Smith:  In  many  instances,  she  does  have  an  attorney.  In  cases 
where  she  couldn't  have  an  attorney,  this  board,  and  pretty  often  in 
her  locality  there  would  be  a  lawyer  having  enough  humanity  about 
him,  who,  after  she  went  to  him  and  stated  her  case,  would  take  the 
case  and  tell  her  to  pay  him  if  she  got  a  settlement,  and  if  not,  there 
would  be  no  charge  for  his  services. 

Mr.  Lord :     I  don't  believe  there  are  many  attorneys  of  that  kind. 

Mr.  Kennedy:     Quite  a  few  of  them  throughout  the  state. 


2ai 

Mr.  Lord :  There  is  some  complaint — I  have  heard  it  myself — that  they 
don't  get  quite  a  square  deal  as  far  as  proper  representation  is 
concerned. 

Mr.  O'Brien:  In  your  opinion,  is  it  necessary  that  provisions  be  made 
in  the  law  for  attorneys  to  represent  injured  employes? 

Mr.  Smith :     No,  sir,  I  don't  think  it  is  necessary. 

Mr.  Thompson :  Ought  there  to  be  a  provision  for  them  to  get  additional 
evidence  to  show  on  appeal? 

Mr.  Smith:  Ordinarily  not.  I  think  that  when  instances  arise  of  that 
kind  that  the  Industrial  Accident  Board  is  empowered  to  see  that 
this  additional  information  is  secured. 

Mr.  Thompson :  You  stated  that,  in  some  instances,  it  was  true  that 
you  worked  to  a  disadvantage. 

Mr.  Smith:  I  might  explain  that  by  saying  that,  when  the  employer 
has  an  award  issued  against  him  and  he  appeals,  he  takes  some  more 
testimony  by  deposition,  giving  reasonable  notice  to  the  employe, 
which  is  required  by  the  law  of  the  state,  and  he  takes  that  testi- 
mony often  with  the  idea  of  neutralizing  the  facts  of  the  testimony 
which  were  taken  before  the  committee  of  arbitration.  If  the 
employe  has  no  attorney,  he  isn't  able  to  appreciate  the  effect  of  that 
testimony  that  was  taken  subsequently  by  the  employer,  and  the 
case  may  come  here  with  this  additional  testimony  taken  by  the 
employer  in  the  absence  of  the  employe,  and  that  testimony  be  pre- 
sented before  the  whole  board,  when  really  the  injured  employe  never 
.has  awakened  to  the  fact  that  it  had  been  taken  or  was  important. 

Mr.  Lord :  Isn't  that  one  thing  alone  strong  enough  to  prove  that  the 
state  should  provide  proper  representation  for  the  employe? 

Mr.  Kennedy:  When  we  find  that  the  employe  is  at  a  disadvantage, 
we  have  additional  evidence  taken  for  him. 

Mr.  Smith :  Possibly.  I  want  to  say  that  there  is  in  the  Supreme  Court 
this  minute,  forty-nine  undecided  Industrial  Accident  Board  appeals 
from  the  full  board  to  the  Supreme  Court.  Of  these  forty-nine 
appeals,  thirteen  have  been  submitted  to  the  Supreme  Court  on 
briefs.  Thirty-six  will  be  upon  the  January  (1918)  calendar.  Of 
these  appeals,  one,  I  believe,  was  appealed  by  the  injured  employe, 
and  the  balance  were  appealed  by  employers  or  insurance  com- 
panies. 

Mr.  Lord :  Isn't  the  reason  for  that  that  the  employe  hasn't  the  means 
to  carry  appeals  to  the  court? 

Mr.  Smith:  I  don't  think  so.  In  close  cases  where  defense  is  tech- 
nical— and  in  many  of  these  cases  it  is — I  haven't  any  hesitancy  in 
saying,  and  some  people  might  say  I  am  liable  to  criticism  for  saying 
it,  that  the  board  desires  to  have  some  of  these  questions  settled, 
and  in  a  close  case  where  the  board  ought  to  have  a  settling  for  its 
guidance,  the  case  is  decided  so  that  the  employer  or  insurance  com- 
pany will  appeal  th^  case  and  settle  that  point,  of  law. 

Mr.  Lord:     Is  thr.t  the  reason  for  so  many  of  the  appeals? 

Mr.  Smith:     For  a  small  per  cent  of  them. 

Mr.  Lord :  So  that  still  it  would  leave  a  very  large  per  cent  of  employers 
appealing  to  the  court,  as  compared  to  the  employes? 

Mr.  Smith:  For  instance,  of  all  those  cases,  I  could  pick  out  fifteen 
that  were  carried  to  the  Supreme  Court  for  no  earthly  reason  and 


the  Supreme  Court  will  dismiss  them  as  soon  as  they  are  presented. 

Mr.  Kennedy:     We  had  a  bill  before  the  legislature  providing  that  the    ; 
Prosecuting  Attorney  of  each  county  should  represent  the  injured 
man  and  that  the  state  should  pay  the  expense,  and  that  the  Attorney 
General  should  represent  the  injured  man  in  the  Supreme  Court 
cases,  but  both  were  defeated. 

Mr.  Lord:  So  that  really  the  board  has  recognized  the  fact  that  the 
employe  should  be  more  adequately  represented,  otherwise  you  would 
not  have  presented  the  bill,  would  you? 

Mr.  Kennedy :     Yes,  sir,  we  did  recognize  it. 

Mr.  Smith :  Speaking  for  myself,  not  the  board,  I  will  say  that  if  any 
assistance  should  be  granted  to  the  employe,  the  law  should  be 
revised  giving  the  Industrial  Accident  Board  an  investigator  or 
an  assistant,  who  was  not  a  member  of  the  committee  of  arbitration, 
who  in  proper  instances  might  act  as  an  advisor  for  the  employe,  j 

Mr.  Lord:  Why  couldn't  the  Attorney  General  or  someone  from  his 
office  do  that  work  ? 

Mr.  Smith:  Well,  Mr  Lord,  there  will  be  this  year  twenty  thousand 
compensable  claims,  and  more,  I  believe.  Correspondence  will  iron 
out  some  and  conferences  will  iron  out  some,  but  there  will  be  arbi- 
trations and  hearings  to  be  held  on  a  great  many  of  them. 

Mr.  Lord :     All  that  the  employe  would  get  a  lawyer  for  would  be  to  ] 
appear  before  the  board.     Couldn't  an  assistant  in  the  Attorney 
General's  office  attend  to  that? 

Mr.  Smith :     One  assistant  could  do  it  as  far  as  work  is  concerned. 

Mr.  Lord :  Would  it  not  be  fair  to  the  poor  man  that  he  have  that  assist- 
ance from  the  state  9 

Mr.  Smith:  I  don't  believe  that  since  I  have  been  on  the  board,  that 
one  injured  employe  has  suffered  any.  I  think  that  where  an  employe 
should  be  represented  is  at  the  first  hearing,  because  there  is 
where  he  gets  his  grilling.  Of  course,  attorneys  could  be  selected 
from  localities  in  which  the  hearings  are  held  and,  I  think  that  under 
Section  10,  Part  3  of  the  act,  that  a  reasonable  construction  of  that 
section  would  make  it  necessary  for  the  state  to  pay  all  of  those 
expenses.  The  reason  that  they  have  not  been  carried  out  is  that 
our  appropriation  was  so  low  that  the  board  could  not  pay  it. 
In  Section  10  of  Part  3,  you  find  this  provision :  "The  arbitrators  ' 
named  by  or  for  thp  parties  to  the  dispute  shall  each  receive  $5.00  a 
day  for  his  services,  but  the  Industrial  Accident  Board  or  any  mem- 
ber thereof  may  allow  reasonable  amounts  in  extraordinary  cases. 
The  fees  of  such  arbitrators  and  other  costs  of  such  arbitrators,  not 
exceeding,  however,  the  taxable  cost  allowed  in  suits  at  law  in  the 
circuit  courts  of  this  state,  shall  be  fixed  by  the  board  and  paid  by 
the  state  as  the  other  expenses  of  the  board  are  paid.  The  fees  and 
the  payment  thereof  of  all  attorneys  and  physicians  for  services  of 
this  act  shall  be  subject  to  the  approval  of  the  Industrial  Accident 
Board." 

I  don't  want  the  commission  to  think  that  the  hearing  of  the  one 
hundred  and  fifty  appeals  is  the  only  thing  to  be  heard  by  this 
board. 

Mr.  Lord :  Where  an  appeal  is  made  to  the  board,  do  you  have  to  grant 
the  petition  ? 


233 


Mr.  Smith :  They  have  a  right  to  appeal  as  a  matter  of  course,  within 
seven  days.  If  they  do  not  appeal  within  the  seven  days,  they  may 
yet  appeal  if  they  can  show  the  Industrial  Accident  Board  that 
justice  permits  the  appeal. 

Mr.  Lord:     So  that  really  every  appeal  is  made  within  seven  days? 

Mr.  Smith :     Yes,  that  is  a  statutory  provision. 

Mr.  Lord:  .Now,  Mr.  Smith,  tell  us  what  can  be  done,  if  anything,  to 
increase  the  efficiency  of  your  department. 

Mr.  Smith :     Thai  is  a  pretty  broad  question,  Mr.  Lord. 

I  hardly  know.  I  think  I  ought  to  say,  as  a  part  of  the  answer  to 
your  question,  that  we  have  here  seven  stenographers  who  are  writ- 
ing letters  and  papers  for  the  full  board,  the  deputies,  secretary  and 
assistant  secretary.  In  addition  to  these  seven,  there  are  two  other 
stenographers,  one  of  whom  is  writing  letters  for  the  acceptance 
department  every  minute  and  the  other  is  working  on  the  card  index. 
Now,  the  work  of  the  assistant  secretary  and  secretary,  a  lot  of  it 
is  taken  up  in  writing  or  dictating  letters  regarding  individual  cases. 
They  have  to  know  the  "Workmen's  Compensation  Law,"  decisions 
of  the  Supreme  Court,  rules  of  the  board,  etc.,  in  order  to  do  their 
duties  well.  We  have  been  endeavoring  to  improve  the  work  of  the 
board  by  standardizing  the  work  of  the  department.  For  illustra- 
tion, every  accident  that  happens  in  the  state  must  be  reported 
within  ten  davs.  Probably  this  year  we  will  get  in  one  hundred  and 
fifty  or  two  hundred  thousand  reports  of  accidents.  Each  of  these 
accidents  has  to  be  reported  a  second  time  on  the  fifteenth  day. 
The  board  has  spent  a  good  deal  of  time  during  the  last  year  trying 
to  work  out  a  system  by  which  the  work  of  the  office  can  become  more 
automatic,  but  I  think  I  am  safe  in  saying  that  probably  90  per  cent 
of  our  cases  result  from  agreements  being  made,  many  others  from 
the  work  of  the  secretary  and  assistant  secretary  in  being  able  to 
quote  the  law,  etc. 
r.  Lord :  How  long  do  your  clerks  work  ? 

Seven  hours  a  day,  the  same  as  all  capitol  employes. 
How  about  vacations  ? 

They  have  the  usual  twenty-four  days'  vacation. 
What  do  you  think  about  vacations  ?    Do  you  think  it  is  too 


[r.  Smith 
Mr.  Lord: 
Mr.  Smith 
Mr.  Lord: 
much? 
Mr.  Smith 
Mr.  Lord : 


I  don't  know  as  I  am  the  right  kind  of  a  judge. 
You  know  about  the  conditions  and  regular  rules  for  office 
help  generally. 

Mr.  Smith:  I  think  the  vacation  is  too  much.  I  will  say  this  about 
Saturday.  All  other  departments,  or  nearly  all  of  them,  close  at  3 
o'clock.  We  run  until  4,  eight  months  of  the  year,  and  in  June, 
July,  August  and  September,  the  four  hot  months,  we  stop  at  1. 
Personally,  I  think  the  state  departments  ought  to  run  from  8  to  12 
and  from  1  to  5.  I  think  there  ought  to  be  an  eight-hour  day. 

Mr.  Kennedy:  In  our  department,  they  work  beyond  their  regular 
hours  all  the  time. 

Mr.  Lord:  Do  you  think  an  eight-hour  day  and  two  weeks'  vacation  a 
year  is  fair  ? 

Mr.  Smith:  I  believe  an  eight-hour  day  would  be  fair  and  two  weeks' 
vacation  would  be  enough. 


234 

• 
Mr.  Lord:     Are  your  employes  appointed  because  of  their  capabilities 

or  because  of  political  influence? 
Mr.  Smith :     There  have  not  been  so  very  many  changes  since  I  have  been 

here. 
Mr.  Lord:     In  employing  help,  what  has  been  the  general  rule  followed? 

Have  they  been  appointed  on  political  recommendations,  or  because 

of  their  being  capable  and  efficient? 
Mr.  Smith:     I  might  say,  without  specifying,  that  I  know  of  only  one 

political  appointment  since  I  have  been  here. 
Mr.  Lord:     What  are  the  requirements  for  appointment  to  a  clerkship 

in  this  department  ? 

Mr.  Smith:     Nothing,  except  personal  examination  of  applicant. 
Mr.  Gloster:     The  fact  is,  that  for  the  last  few  years  it  has  been  hard  to 

get  a  good  stenographer  and,  until  lately,  we  have  not  had  very 

many  applications. 
Mr.  Smith:     Of  the  ordinary  clerks,  we  have  one  clerk  and  stenographer 

getting  $1,100.00  per  year.    She  is  worth  more  than  that  to  any  man's 

business,  either  public  or  private,  but  until  the  present  year  our 

appropriation  was  so  small  that  we  couldn't  pay  any  more. 
Mr.  Kennedy:     We  come  under  the  f 800. 00  salary  law  and  you  can't 

get  a  first-class  stenographer  for  f 800.00. 
Mr.  Lord:     We  want  you  people  to  give  us  your  views  as  to  the  graded 

salary  law — whether  it  has  hampered  you  in  getting  efficient  help, 

or  not. 
Mr.  Smith:     I  don't  think  it  has,  Mr.  Lord.    The  graded  salary  law  has 

not  bothered  us. 

Mr.  Lord:     What  is  the  object  of  your  paying  such  low  salaries  then? 
Mr.  Kennedy :     The  law  is  one  reason.    We  are  limited  to  an  average  of 

11,100.00. 
Mr.  Lord:     Don't  you  think  it  is  very  important  that  you  pay  high 

enough  salaries  to  get  efficient  help?    Isn't  it  unwise  to  "do  otherwise? 
Mr.  Smith:     I  think  we  have  as  efficient  a   crew  of  workers  in  this 

department  as  in  any  other  state  department. 
Mr.  Lord:     That  may  be  very  true,  but  the  point  is,  is  there  any  way 

you  can  increase  the  efficiency  ?     Don't  the  low  salaries  tend  to  keep 

down  the  efficiency  of  your  help?    What  do  you  think  of  the  graded 

salary  law? 
Mr.  Smith :     I  think  there  should  be  some  limit.    As  to  just  whether  it 

is  correct  as  it  is,  I  would  not  want  to  say,  but  I  think  there  should 

be  a  graded  limit.    My  experience  tells  me  that  the  state  of  Michigan 

has  a  whole  lot  of  people  working  for  it  that  don't  earn  the  money 

they  get. 
Mr.  Lord:     What  do  you  think  of  the  proposition  of  fixing  a  maximum 

amount  for  clerks,  but  no  minimum? 
Mr.  Smith:     I  am  inclined  to  think  that  that  T/ould  be  a  very  wise 

thing. 

Mr.  Lord :     Do  you  receive  reports  from  the  secretary  or  assistant  secre- 
tary as  to  the  work? 

Mr.  Smith  :     Only  as  I  talk  the  matter  over  with  them  verbally. 
Mr.  Lord:     Your  salaries  are  not  any  too  large.     The  question  in  the 

minds  of  the  commission  is  whether  you  can  get  the  efficient  help 

you  need  by  paying  the  salaries  you  are  paying. 


235 

Mr.  Smith:  We  have  ten  to  whom  we  are  paying  each  $800.00  a  year. 
Take  the  women  who  handle  the  files  in  this  office,  they  work  hard. 
It  is  laborious  work.  They  need  an  education  about  such  as  a  coun- 
try school  teacher  needs  and  I  believe  the  ordinary  school  teacher 
in  the  graded  school  receives  $800.00  or  $900.00  a  year. 
I  believe  that  some  of  our  clerks  and  stenographers  are  attracted  to 
the  positions  here  because  of  the  seven-hour  day  and  twenty-four-day 
vacation.  I  would  like  to  see  the  vacation  cut  to  two  weeks,  the 
hours  raised  to  eight  hours  per  day  and  the  salary  increased. 

Mr.  Lord:  If  every  clerk  worked  eight  hours  instead  of  seven,  would 
you  need  less  clerks? 

Mr.  Gloster:  It  might  not  make  much  difference  in  this  department, 
because  most  of  our  clerks  work  eight  hours  a  day  now. 

Mr.  Lord :  How  much  money  did  you  say  the  legislature  gave  you  last 
year? 

Mr.  Smith:     $70,000.00  per  year. 

Mr.  Lord:  You  have  to  pay  the  entire  cost  of  the  department  out  of 
that  appropriation  ? 

Mr.  Smith:     Everything. 

Mr.  Lord:     Nothing  from  the  general  fund  in  addition? 

Mr.  Smith :  No.  We  pay  for  all  our  books,  printing,  paper,  filing  cases, 
salaries  and  everything  out  of  one  appropriation.  We  get  back  a 
little,  but  that  goes  into  the  general  fund  of  the  state.  Even  our 
rent  must  be  paid  out  of  our  appropriation,  traveling  expenses,  depu- 
ties, arbitration  fees,  etc.,  are  all  paid  out  of  the  appropriation. 

Mr.  Lord:  Has  the  efficiency  of  the  department  been  crippled  by  the 
lack  of  insufficient  money  appropriated  by  the  legislature? 

Mr.  Kennedy:     Yes,  sir,  it  has. 

Mr.  Lord:     To  what  extent? 

Mr.  Kennedy:  To  the  extent  that  we  could  never  get  the  proper  help 
nor  could  we  get  the  money  to  pa}*-  the  salaries.  People  who  were 
working  here  worked  right  along  for  quite  a  while  without  their 
salaries,  because  our  funds  had  been  exhausted.  We  had  not  the 
money  to  even  think  about  doing  the  work  we  are  doing  now.  We 
had  to  watch  everything ;  in  fact,  we  are  doing  the  same  thing  right 
now. 

Mr.  Lord :  WThat  was  your  procedure  when  you  requested  money  from 
the  legislature?  What  was  the  procedure  to  get  money  for  the 
upkeep  of  your  department;  what  did  you  present  to  the  legislature 
and  what  information  did  you  furnish  it? 

Mr.  Kennedy:     Why,  we  itemized  all  our  financial  needs. 

Mr.  Lord:     Did  you  do  that  at  every  session  of  the  legislature? 

Mr.  Kennedy:  Yes.  In  one  or  two  cases  we  had  to  go  back  for  a 
deficiency  appropriation. 

Mr.  Lord:  What  reason  did  the  legislature  give,  or  the  Finance  Com- 
mittees give,  for  cutting  out  the  $5,000.00  appropriation  you  asked 
for  ?  Do  you  remember  ? 

Mr.  Kennedy:  Mr.  Hinkley  was  chairman.  Perhaps  he  can  tell  you. 
There  were  no  reasons  given,  they  simply  cut  it  out. 

Mr.  Gloster:  We  had  quite  a  session  with  them.  Took  our  records  all 
before  them,  but  they  stopped  the  meeting  and  said  they  had  another 
important  meeting. 


236 

Mr.  Lord :  Mr.  Smith,  what  legislation  was  proposed  by  way  of  amend- 
ments to  the  compensation  law  last  session  ? 

Mr.  Smith:  We  got  one  bill  through  that  we  think  has  cleared  the 
atmosphere  in  our  iepartment  very  materially. 

Mr.  Lord:     Do  you  think  the  law  needs  any  amendments  now? 

Mr.  Smith:  I  think  that  in  some  way  it  ought  to  provide  for  medical 
and  surgical  treatment  of  the  injured  employe  that  will  make  him 
well.  At  the  present  time  the  employer  can  treat  him  for  three 
weeks  and  leave  him.  I  would  say  that  the  best  rule  would  be  to 
put  it  at  ninety  days,  which  time  would  cover  nearly  all  cases,  and 
possibly  put  a  provision  in,  that  in  peculiar  cases  where  injury  is 
so  great  that  he  ought  to  have  more  than  ninety  days,  that  upon 
proper  application  to  the  Industrial  Accident  Board,  he  could  have 
it.  This  would  compel  the  employer  to  take  care  of  every  employe 
for  ninety  days  if  he  needed  it.  I  have  known  where  blood  poison 
has  set  in  from  a  little  injury  where  the  employer  has  taken  care 
of  him  three  weeks  and  dropped  him.  In  that  case  the  employer  has 
to  pay  for  his  life  and  it  would  be  cheaper  for  the  employer  and 
better  for  both  sides  if  this  amendment  could  be  passed.  I  believe 
the  state  can,  well  afford  to  pay  for  the  administration  of  this  law ; 
that  what  the  employer  ought  to  do  is  to  protect  the  injured  man. 
This  law  is  saving  the  state  a  good  many  thousand  dollars  a  \ear  that 
it  previously  spent  in  courts.  Another  way  that  this  law  should  be 
amended,  I  believe,  is  that  the  compensation  of  the  injured  employe 
should  start  after  the  first  week.  As  it  is  now  it  starts  after  the  first 
fifteen  days. 

Mr.  Lord:     Was  the  object  of  that  to  save  expense  to  the  employer? 

Mr.  Smith:  I  wouldn't  say  that.  If  a  man  is  incapacitated  for  eight 
weeks,  the  employer  is  obliged  to  pay  him  for  the  first  two  weeks. 
It  was  enacted  so  that  the  employe  would  not  be  tempted  to  deceive 
the  employer  and  take  a  week  or  so  off  when  he  ought  to  be  at 
work. 

Mr.  Lord:  Your  idea  is  that  compensation  should  start  at  the  end  of 
seven  days? 

Mr.  Smith:  I  think  the  eighth  day  is  the  proper  time..  Pick  up  the 
first  week's  wages  at  about  the  fourth  week. 

Mr.  Lord :  Why  don't  you  make  such  a  recommendation  in  your  annual 
report  ? 

Mr.  Smith :  The  Industrial  Accident  Board  has  largely  taken  the  posi- 
tion that  it  ought  to  act  aloof  to  both  the  employer  and  employe. 
This  board  is  ready  to  make  some  recommendations.  It  strikes  me 
that  the  care  of  the  injured  man,  to  make  him  well,  is  the  first 
thing  he  is  entitled  tof  and  the  industry  ought  to  pay  that ;  the  next 
thing  is,  he  should  be  supported  and  maintained  while  he  is  getting 
well,  and  the  industry  should  pay  that.  I  don't  believe  anyone  would 
be  in  favor  of  giving  a  man  such  a  high  compensation  that  it  would 
tempt  him  to  lie  down  on  the  job. 

Mr.  Lord:  Has  it  been  your  experience  with  the  average  laboring  man 
that  he  would  do  such  a  thing? 

Mr.  Kennedy:  Of  course,  we  are  dealing  with  some  foreigners  and 
under  some  exaggerated  conditions,  but  I  don't  believe  that  there  is  a 


237 

man  in  Michigan  who  would  do  that.    I  believe  most  of  the  laboring 

men  are  honest  men. 
Mr.  Lord:     The  laboring  man  don't  put  very  much  over  on  the  insurance 

company  or  employer  either. 
Mr.  Smith :     I  think  that  is  the  general  rule,  but  there  are  a  good  many 

men,  not  only  laborers,  but  superintendents,  men  of  affairs  as  well, 

that  if  the}7  could  make  almost  as  much  sitting  around  and  taking 

vacations,  they  would  be  tempted  to  do  so. 
Mr.  Lord:     Those  are  very  rare  exceptions,  I  believe. 
Mr.  Gloster:     I  think  as  a  rule  the  man  wants  to  get  back  to  work  as 

soon  as  he  can. 
Mr.  Kennedy:     He  won't  rest  very  easy  on  $10.00  a  week  when  he  can 

make  $24.00  a  week  at  work. 


BOARD  OF  CORRECTIONS  AND  CHARITIES 

Mr.  Lord:  Mr.  Murray,  you  are  the  Secretary  of  the  State  Board  of 
Corrections  and  Charities? 

Mr.  Murray:     Yes  sir. 

Mr.  Lord :  Will  you  state  to  the  commission  the  various  activities  of 
the  board,  what  good  you  have  accomplished  for  the  state  and  what 
you  propose  to  do  in  the  future,  with  particular  reference  to  any 
increase  in  your  activities,  which  would  necessitate  additional  cost? 

Mr.  Murray :  I  don't  know  how  to  get  at  that  except  perhaps  to  start 
in  here.  First  we  have  general  supervisory  powers  over  the  state 
penal,  reformatory  and  charitable  institutions. 

Mr.  Lord :     Tell  us  what  the  supervisory  authority  consists  of, 

Mr.  Murray:  The  board  meets  at  each  state  institution  once  a  year, 
when  any  matter  relating  to  the  general  policy  of  an  institution  is 
considered.  Twenty-two  out  of  the  twenty-eight  meetings  of  the 
board  during  the  year  1914  were  held  at  state  institutions.  The  last 
report  for  the  biennial  period  ending  June  30th,  1916  shows  that  the 
board  held  forty  meetings,  thirty  of  which  were  held  at  state,  county 
and  private  institutions.  That  would  be  about  twenty-six  meetings 
that  were  held  at  state  institutions. 

Mr.  Lord:  What  does  the  board  do  when  they  go  to  the  state  insti- 
tutions ? 

Mr.  Murray:  They  make  an  inspection  of  the  institution,  go  through 
all  the  departments  and,  once  in  two  years,  consider  the  matter  of 
recommending  appropriations  to  the  legislature. 

Mr.  Lord:  What  do  you  do  in  the  matter  of  determining  whether  or 
not  an  institution  needs  the  money  it  asks  for? 

Mr.  Murray :  If  they  are  asking  for  additional  room,  they  make  a  state- 
ment to  the  board  showing  the  capacity  of  the  institution,  the  num- 
ber of  vacant  beds,  what  their  increase  has  been  every  year  for, 
usually,  five  years.  We  could  tell  you  now  what  the  net  increase  has 
been  at  each  of  the  state  hospitals  for  the  last  five  years.  If  it 
involves  a  contract  for  a  building  they  figure  out  and  present  to  the 
board  a  detailed  statement  of  the  cost  of  that  contract.  That  is 
printed  in  the  report  in  detail.  If  it  is  an  institution  asking  for 
additional  money,  they  are  required  to  file  with  the  board  a  state- 


238 

ment  showing  the  amount  of  money  actually  expended  for  current 
expenses.  That  is,  if  the  board  has  to  pass  upon  the  matter  of  cur- 
rent expenses,  it  is  filed  here. 

Mr.  Lord :     What  do  you  do  after  it  is  filed  here? 

Mr.  Murray:     Go  to  the  institution  and  consider  them. 

Mr.  Lord :     In  what  way  do  you  consider  them  ? 

Mr.  Murray:  Simply  by  comparison  with  previous  costs.  If  their  re- 
quest for  any  particular  item  seems  to  be  excessive,  they  are  required 
to  state  to  the  board  why  it  is  increased. 

Mr.  Lord:     How  much  time  does  the  board  spend  at  each  institution? 

Mr.  Murray:  Well,  I  couldn't  tell  you  just  how  many  hours  we  put  in 
at  an  institution.  We  always  figure  on  enough  time  to  make  a  thor- 
ough inspection  of  the  institution  and  go  over  in  detail  the  matters 
with  the  Superintendent  or  some  member  of  Hie  board  of  control. 
Usually  one  or  two  menbers  of  the  board  arc  present  when  we  pass 
upon  the  appropriation.  It  happens  that  sometimes  if  the  board  is 
not  satisfied  with  the  estimates  as  they  come  in,  that  we  request 
the  Board  of  Control  to  appear  before  our  board  and  explain  their 
needs.  I  think  there  were  three  or  four  cases  of  that  kind  during  the 
last  biennial  period. 

Mr.  Lord:  When  you  speak  of  estimates,  you  refer  to  appropriations, 
for  new  buildings,  etc.? 

Mr.  Murray:  That  is  all  included.  Their  estimates  come  in  on  printed 
forms  prescribed  by  the  State  Accountant  and  follow  out  his  general 
accounting  system.  If  it  is  an  institution,  those  estimates  come  in  on 
blank  forms  and  they  are  required  to  give  their  data  cancerning 
same.  For  instance,  the  average  number  of  inmates,  per  capita  cost 
for  maintaining  the  institution  for  the  last  year  and  expenses  in 
detail  for  every  item  going  to  make  up  their  current  expense  account. 
Then  opposite  that,  they  show  the  amount  in  the  estimate  that  is 
needed  for  each  year  of  the  next  biennial  period.  If  the  special  ap- 
propriation is  for  a  new  building,  they  submit  their  estimates  in 
detail.  Those  are  printed  in  the  report." 

Mr.  Lord:  The  reason  1  asked  how  much  time  the  board  members  really 
spent  at  the  institution,  in  making  an  investigation  as  to  matters  of 
the  institution  in  a  financial  way,  was  to  ascertain  whether  the 
board  actually  did  go  into  that  matter  or  whether  it  was  left  largely 
to  the  secretary  of  the  board. 

Mr.  Murray:  No,  we  do  the  detail  work  in  the  office.  Of  course,  during 
what  we  call  their  off  year,  we  get  into  the  state  institutions  and 
really  spend  more  time  than  we  do  at  the  meetings  just  previous  to 
the  legislature.  Our  regular  meetings  are  held  at  the  state  institu- 
tions. Probably  the  routine  work  of  the  board  will  take,  on  an  aver- 
age, about  two  hours  unless  something  out  of  the  ordinary  occurs, 
then  the  remainder  of  the  day  is  spent  in  the  institution.  When  we 
go  to  the  institutions  previous  to  the  legislative  sesion,  we  work 
them  consecutively.  We  go  out  on  a  trip  and  make  five  or  six  insti- 
tutions. Then,  when  our  estimates  come  in,  they  are  worked  out  in 
detail  and  boiled  down.  The  board  is  together  going  from  one  insti- 
tution to  another  and,  with  everything  fresh  in  their  minds,  they  form 
a  pretty  general  idea  of  what  appropriations  they  ought  to  recom- 
mend. After  all  have  been  examined,  we  make  up  a  table  showing 


239 

the  appropriations  asked  for.  Last  year  we  spent  three  days,  after 
being  to  all  the  state  institutions,  considering  what  recommenda- 
tions we  would  make  to  the  legislature. 

Mr.  Lord:  Do  you  ever  cut  out  many  items  of  any  kinds,  reducing  es- 
timates, etc.? 

Mr.  Murray :  In  answering  that,  I  will  refer  you  to  page  13  of  our  last 
report.  They  requested  $1,878,976.60  and  the  board  recommended 
$1,326,000.00,  as  the  total  for  all  institutions. 

Mr.  Lord:  What  was  the  aggregate  amount  that  was  actually  appro- 
priated by  the  legislature? 

Mr.  Murray:  We  have  the  amounts  actually  appropriated,  but  we 
haven't  the  total. 


SPECIAL  APPROPRIATIONS 


Institution. 

Kalamazoo  State  Hospital 
Pontiac  State  Hospital 
Traverse   City   Hospital 
Newberry  State  Hospital 
Ionia  State  Hospital 
Michigan  Home  and  Training 

School 

Farm  Colony  for  Epileptics 
Michigan  Reformatory 
Branch  Prison  at  Marquette 
Industrial  School  for  Boys 
Industrial  Home  for  Girls 
State  Public  School 
Employment  Institution  for 

the  Blind 

Michigan  School  for  the  Blind 
School  for  the  Deaf 
State  Sanatorium 


Board  Legislature 

Requested.  Recommended.  Allowed. 

$261 ,794.90     $1 11,081.90  $55,209.00 

184,500.00        84,000.00  79,000.00 

49,158.50        34,697.00  24,943.50 

162,622.10        77,583.10  57,200.00 

19,725.13         19,725.13  19,725.13 


189,250.00 

189,250.00 

66,000.00 

404,670.40 

392,170.40 

232,580.40 

3,600.00 

3,600.00 

3,600.00 

73,000.00 

64,000.00 

17,100.00 

142,781.00 

142,781.00 

11,258.00 

65,376.00 

13,776.00 

4,836.00 

29,738.22 

17,391.27 

10,894.00 

18,600.00 
85,317.25 
93,968.10 
94,875.00 


2,600.00 
85,217.25 
35,500.00 
53,125.00 


1,250.00 
13,250.00 
38,700.00 
50,575.00 


Mr.  Lord:     Do  you  have  anything  to  do  with  the  maintenance  of  insti- 
tutions as  far  as  current  expenses  are  concerned? 

Mr.  Murray :     Only  so  far  as  eight  institutions  are  concerned. 

Mr.  Lord:     Do  you  have  anything  to  do  with  the  recommendations  for 
the  purchase  of  lands,  etc  ? 

Mr.  Murray :     It  is  included  in  the  estimate  of  the  eight  out  of  nineteen 
institutions. 

Of  course,  you  know  what  the  situation  was  at  the  last  session  of  the 
legislature.  They  were  confronted  with  a  great  many  deficiency 
bills  owing  to  the  increase  in  the  cost  of  food  stuffs,  etc.  Current 
expenses  had  increased  beyond  anyone's  expectations,  and  they  were 
called  upon  to  increase  the  amount.  Probably  no  legislature  for 
years  had  been  confronted  with  the  situation  that  confronted  the 
last  one.  Of  course,  in  the  matter  of  contracts  for  buildings,  it  was 
a  big  item,  the  cost  being  thirty  per  cent  up  more  than  it  was 
two  years  ago. 


240 

Mr.  Lord :  You  say  that  you  have  nothing  whatever  to  do  with  approv- 
ing the  amounts  appropriated  for  current  expenses  ? 

Mr.  Murray :     No,  I  don't  say  that.    We  would  have  as  far  as  the  eight 
schools  are  concerned. 

Mr.  Lord :     Enumerate  those  schools,  will  you,  Mr.  Murray  ? 

Mr.  Murray :  Michigan  School  for  the  Blind  ;  Industrial  Home  for  Girls ; 
State  Public  School;  Michigan  Soldiers'  Home;  Industrial  School 
for  Boys;  Michigan  Employment  Institution  for  the  Blind;  State 
Sanatorium  and  Michigan  School  for  the  Deaf. 

Mr.  Lord:  In  former  sessions  of  the  legislature,  how  closely  has  the 
appropriation,  taking  it  in  the  aggregate,  for  these  same  institu- 
tions, met  your  recommendations? 

Mr.  Murray:  I  don't  know.  As  a  matter  of  fact,  this  is  the  first  time, 
I  have  ever  compared  the  appropriations  with  the  amounts  asked 
for. 

To  give  you  an  idea  of  what  the  legislature  will  do  notwithstanding 
the  recommendations  of  this  board,  I  will  say  that  Dr.  Christian 
asked  for  two  cottages  for  patients  with  a  capacity  of  100  each.  This 
board  disapproved  one  on  the  grounds  that  the  institution  at 
Wahjaniega  would  be  enlarged  so  as  to  take  care  of  the  Feeble  Mind- 
ed and  Epileptics  now  at  the  Pontiac  State  Hospital.  At  the  time 
that  the  legislature  was  considering  these  requests,  Dr.  Christian 
had  a  waiting  list  of  fourteen,  the  net  increase  in  his  institution  for 
the  last  biennial  period  had  been  ninety;  with  this  information  before 
the  legislature,  the  House  cut  out  any  appropriation  whatever  for 
additional  room  at  the  Pontiac  State  Hospital.  The  Senate  Com- 
mittee stood  pat  on  the  proposition  as  they  favored  the  granting  of 
one  cottage,  and  they  finally  came  together  and  gave  Dr.  Christian 
one  cottage. 

Mr.  Lord :  Mr.  Murray,  you  have  the  authority  to  approve  the  transfer 
of  funds  in  the  institutions ;  what  does  that  mean  ? 

Mr.  Murray:  That  means  if  the  legislature  in  one  act  makes  an  ap- 
propriation for  more  than  one  purpose  and  there  is  a  surplus  remain- 
ing in  one  fund,  and  the  fund  created  for  some  other  purpose  is  insuf- 
ficient, the  surplus  may  be  transferred  upon  the  approval  of  this  board 
and  the  Auditor  General.  That  would  not  apply  to  two  different 
acts.  For  instance,  if  the  legislature  of  1917  made  an  appropriation 
by  one  act  to  contract  for  one  cottage,  and  by  another  act  to  contract 
for  another  cottage,  we  would  not  be  able  to  transfer,  but  if  the 
legislature  appropriates  for  three  or  four  purposes  in  one  act,  funds 
may  be  transferred. 

Mr.  Lord:  Among  your  activities,  you  are  required  to  inspect  county 
jails,  county  infirmaries,  etc.  What  is  the  object  of  the  state  med- 
dling with  the  county's  business? 

Mr.  Murray:  That  is  not  even  a  debatable  question.  The  state  should 
have  supervision  over  all  county  jails,  etc. 

Mr.  Lord:     Don't  the  supervisors  attend  to  that? 

Mr.  Murray :     They  may  be  supposed  to,  but  they  won't. 

Mr.  Lord:  They  won't  because  the  state  is  constantly  poking  its  nose 
into  their  business. 

Mr.  Murray :     No,  I  don't  think  so. 

Mr.  Lord :    Who  makes  those  inspections  ? 


241 

Mr.  Murray :  I  do  considerable  of  the  work.  However,  Mr.  Lou  tit  who 
is  in  the  western  part  of  the  state  takes  eight  or  ten  counties.  Mr. 
Jopling  used  to  work  all  the  Upper  Peninsular,  Mr.  Fisher  is  a  com- 
paratively new  man. 

Mr.  Lord:  Do  these  members  make  a  report  to  the  board  when  they 
make  inspections  ? 

Mr.  Murray:     Yes,  sir. 

Mr.  Lord :     Do  you  have  those  reports  on  file  ? 

Mr.  Murray:     Yes,  sir. 

Mr.  Lord :     Do  you  also  have  authority  to  inspect  city  jails,  etc  ? 

Mr.  Murray:     Certainly,  and  village  jails,  police  stations,  etc. 

Mr.  Lord :     Do  you  think  it  is  the  proper  thing  for  the  state  to  do  ? 

Mr.  Murray:     We  do.    We  have  accomplished  considerable  good. 

Mr.  Lord :  It  would  seem  to  me  that  a  city  the  size  of  Lansing,  for  in- 
stance, could  handle  its  own  police  station,  etc,  and  look  after  it 
properly  without  interference  on  the  part  of  the  state. 

Mr.  Murray :  Lansing  does  look  after  them,  but  we  can  cite  you  a  good 
many  that  don't. 

Mr.  Lord :     Isn't  it  a  matter  really  of  local  concern  ? 

Mr.  Murray :  We  don't  think  so.  There  seems  to  be  no  question  about  it 
at  all  in  any  state  where  they  have  a  State  Board  of  Control.  Why 
don't  you  say  it  is  none  of  the  business  of  the  Board  of  Health  what 
the  water  system  is  in  a  city  ? 

Mr.  Thompson:  I  would  like  to  have  you  make  your  statement  briefly 
as  to  the  reason  for  the  state  board  having  jurisdiction  over  this  line 
of  work. 

Mr.  Murray :  Of  course,  the  principal  reason  is  that  the  county  author- 
ities don't  bring  the  standards  up  to  what  they  should  be.  Your 
county  jails  are  state  institutions  in  a  way  and  your  circuit  court  is 
also.  The  principal  reason  is  that  your  county  authorities  will  not 
give  the  matter  proper  attention. 

Mr.  Thompson :  Better  supervision  by  the  state  than  by  local  author- 
ities? 

Mr.  Murray :     That  would  seem  to  be  true.    Before  the  board  had  author- 
ity to  close  county  jails,  we  closed  six  jails  through  the  County  Cir- 
cuit Court  Commissioner.    Those  were  four  years  ago;  we  have  not 
closed  a  county  jail  since  1914. 
Mr.  Thompson :     What  has  been  the  result  of  your  supervision  of  County 

Infirmaries  ? 

Mr.  Murray:     The  conditions  have  been  very  much  improved.     Sixty 
per  cent  of  the  counties  have  had  improvements  made  by  way  of 
water  systems,  lighting,  ventilating,  etc. 
Mr.  Thompson:     Does  that  result  in  a  saving  of  money  for  the  people, 

or  improvement  of  service? 
Mr.  Murray:     It  would  result  in  better  care  of  men  and  women  in  the 

institutions. 

Mr.  Hinkley:  In  doing  this  work  that  we  are  discussing,  are  you  doing 
it  on  your  own  initiative  or  because  you  are  authorized  to  do  it  by 
law? 

Mr.  Murray:  The  law  requires  that  once  every  year  we  inspect  every 
county  jail  and  infirmary.  We  follow  the  law,  except  two  years  ago 
when  we  did  not  have  funds  enough. 


242 

Mr.  Hinkley:  When  the  members  go  out  to  do  that  work,  they  simply 
get  their  expenses  ? 

Mr.  Murray:  That  is  all  that  they  ever  get,  even  for  attending  meet- 
ings of  the  board,  etc. 

Eight  out  of  nineteen  institutions  must  submit  to  this  board 
a  detailed  statement  of  what  was  expended  by  them  during  the  fiscal 
year,  also  showing  in  detail  what  they  estimate  they  are  going  to 
spend  for  every  item,  for  each  of  the  next  two  years.  The  law  pro- 
vides that  the  Board  of  Trustees  of  the  State  Hospitals  meet  annu- 
ally with  the-Board  of  State  Auditors  and  fix  the  per  capita,  subject 
to  the  approval  of  the  Governor.  This  board  recommends  to  the 
legislature  wHat  appropriation  shall  be  made,  but  the  legislature 
appropriates  what  it  may  see  fit.  Mr.  Mathews  tells  me  that  they 
really  don't  meet  with  the  Board  of  Trustees. 

Now,  here's  another  angle ;  the  per  capita  cost  of  the  Michigan  Home 
and  Training  School  is  fixed  by  the  Board  of  Control  of  that  insti- 
tution together  with  the  Board  of  Auditors,  subject  to  approval 
of  the  Governor.  They  show  at  that  .meeting  what  they  have 
expended  for  current  expenses,  and  what  they  estimate  they  will 
spend  for  the  next  two  years,  and  then,  after  it  is  approved  by  the 
Board  of  Auditors,  it  goes  to  the  Governor  for  approval.  The  same 
thing  applies  to  the  Farm  Colony  for  Epileptics.  There  really  are 
three  or  four  ways  of  getting  the  per  capita  rate  for  state  institu- 
tions. 

Mr.  Lord:  These  classifications  are,  as  far  as  you  can  find  out,  made 
without  reason,  but  are  statutory  ? 

Mr.  Murray :  They  are  statutory.  I  can't  see  any  reason  for  them.  It 
should  be  uniform.  I  think  some  board  or  department  should  pass 
upon  the  matter  of  estimates  for  current  expenses. 

Mr.  Thompson:  From  your  experience  with  this  State  Board  of  Cor- 
rections and  Charities,  do  you  think  a  board  to  control  similar  in- 
stitutions entirely,  would  be  advisable,  or  not? 

Mr.  Murray:  I  don't  see  where  you  would  be  at  any  particular  advan- 
tage that  way.  You  would  have  three  or  four  boards  in  place  of  one 
board  for  each  institution,  together  with  a  board  that  would  have 
general  advisory  authority. 

Mr.  Lord :  Do  you  think  that  the  asylums  would  be  better  governed  by 
one  board  than  they  are  now  ? 

Mr.  Murray :  I  think  where  every  institution  has  its  separate  board,  the 
board  members  give  it  more  attention  than  one  board  would  give 
five  or  six  institutions. 

Mr.  Lord:  The  same  argument  would  apply  to  every  class  of  institu- 
tion, would  it? 

Mr.  Murray:     Yes,  sir. 

Mr.  Lord:  How  much  attention  do  the  present  boards  give  to  their 
work  now  ? 

Mr.  Murray:     I  don't  know. 

Mr :  Lord :  Have  you  ever  given  any  study  or  thought  to  the  matter  of  the 
control  of  institutions  in  other  states ;  the  centralization  of  control  ? 

Mr.  Murray:  I  have  heard  it  discussed  some  and  have  read  about  it 
some. 

Mr.  Lord :    Have  you  ever  made  any  comparison  of  costs  ? 


243 

Mr.  Murray:  I  have  made  comparison  of  costs  with  the  State  of  Ohio, 
which  has  a  board  of  Administration. 

Mr.  Lord :  How  does  the  cost  of  institutions  in  Ohio,  under  that  board, 
compare  with  the  cost  of  institutions  in  Michigan? 

Mr.  Murray:     Their  cost  exceeds  ours.  (Copy  given  to  commission). 

Mr.  Thompson  :     What  year  was  that  for? 

Mr.  Murray :     Last  year. 

Mr.  Lord:  You  really  are  not  an  advocate  of  centralization  of  author- 
ity? 

Mr.  Murray:  I  have  not  been  convinced  that  it  is  any  better,  or  as 
good,  as  Michigan's  present  system.  I  am  open  to  conviction. 

Mr.  Lord :  Is  Ohio  the  only  state  that  you  have  ever  made  any  com- 
parative, statement  with  ? 

Mr.  Murray:  Yes.  That  is  the  state  that  one  member  of  the  1917 
legislature  saw  fit  to  call  attention  to  and  that  is  what  prompted 
me  to  undertake  to  find  out. 

Mr.  Lord:     What  did  you  have  included  in  that  cost? 

Mr.  Murray:  Current  expenses;  we  did  not  compare  with  special  pur- 
poses or  expenses. 

Mr.  Lord:  There  might  be  some  differences  in  what  constituted  cur- 
rent expenses  in  Ohio  and  those  in  Michigan. 

Mr.  Murray :  I  cut  out  a  lot  of  costs  that  Ohio  had  that  Michigan  does 
not  have. 

Mr.  Lord :  Did  you  send  a  copy  of  that  comparison  to  the  Board  of 
Administration  in  Ohio? 

Mr.  Murray :     No  sir. 

Mr.  Lord :     I  think  I  would  do  that  if  I  were  you. 

Mr.  Murray:  I  spent  three  hours  in  going  over  the  matter  with  Mr. 
Shier,  who  is  Secretary  of  the  State  Board  of  Charities  of  Ohio.  I 
got  the  figures  from  the  Auditor  of  the  State  of  Ohio. 

Mr.  Lord:    'Are  you  in  favor  of  a  state  architect? 

Mr.  Murray:     I  don't  think  I  am. 

Mr.  Lord:  Do  you  know  what  it  has  cost  the  State  of  Michigan  for 
services  of  architects? 

Mr.  Murray :     No,  I  don't  know. 

Mr.  Lord:  Why  don't  you  think  it  would  be  advisable  to  have  a  state 
architect  ? 

Mr.  Murray:  Some  three  years  ago,  I  consulted  with  several  states  re- 
garding the  matter  and,  I  think,  with  one  or  two  exceptions,  it  did  not 
appear  to  be  working  out  satisfactorily.  I  have  not  gone  over  these 
and  refreshed  my  memory,  but  I  think  it  was  three  of  four  years  ago 
I  consulted  with  Amos  Butler  of  the  Indiana  board;  with  the  New 
Jersey  board  and  a  number  of  others.  I  am  not  strong  on  the  prop- 
osition one  way  or  the  other,  and  have  not  made  investigation  enough 
to  warrant  me  in  taking  any  particular  views  on  the  subject. 

Mr.  Thompson:  Is  it  your  judgment  that  your  supervision  of  building 
buildings  has  been  beneficial? 

Mr.  Murray :  The  plans,  as  far  as  sanitary  conditions  are  concerned, 
are  passed  on  by  the  State  Board  of  Health  before  we  pass  on  them. 
Ordinarily  the  man  at  the  head  of  a  state  institution  knows  better 
the  kind  of  arrangement  he  wants  for  a  particular  institution.  The 
plans  are  never  approved  by  this  board  until  the  State  Sanitary 
Engineer  has  adopted  and  passed  upon  them. 


244 

Mr.  Lord:  Do  you  know  of  any  state  institution  that  has  farm  lands 
that  they  don't  use  ? 

Mr.  Murray:  We  know  of  state  institutions  that  have  farm  lands  that 
they  don't  use  to  a  very  good  advantage. 

Mr.  Lord :     Where  are  they  ? 

Mr.  Murray:  Well,  two  I  would  mention,  Michigan  School  for  the 
Deaf  at  Flint  and  the  State  Sanatorium  at  Howell. 

Mr.  Lord :  To  what  use  do  they  put  those  lands  that  they  are  a  losing 
proposition  ? 

Mr.  Murray:  The  Board  took  this  position.  We  doubted  the  advisa- 
bility of  ownership  of  farms  in  connection  with  institutions  where  the 
inmates  of  that  institution  cannot  be  employed;  for  instance,  the 
School  for  the  Deaf  uses  few,  if  any,  of  their  inmates  and  they  don't 
and  can't  at  Howell.  We  went  on  record  quite  strongly  with  refer- 
ence to  the  institution  at  Howell. 

Mr.  Lord :  What  is  the  nature  of  your  supervision  of  the  county  agency 
system  ? 

Mr.  Murray:  The  county  agent  is  appointed  by  the  Governor  upon  rec- 
ommendation of  this  board,  and  he  holds  his  office  during  the  pleasure 
of  the  Governor. 

Mr.  Lord:     What  supervision  do  you  have  over  him? 

Mr.  Murray:  He  is  the  agent  for  this  board  in  his  county,  makes  re- 
ports to  this  board  of  all  work  done  in  Juvenile  Court,  or  in  making 
investigations  of  homes  where  children  have  been  placed  out. 

Mr.  Lord:  What  authority  have  you  in  the  matter  of  expenses  of  the 
county  agent? 

Mr.  Murray:  The  County  Agent  in  making  his  claim  for  expenses 
makes  it  in  duplicate;  this  is  approved  by  the  institution,  and  then 
the  Probate  Court  certifies  that  his  report  has  been  filed  with  him, 
and  that  is  all  we  can  certify  to.  When  the  claim  reaches  this  office, 
after  having  been  certified  to  by  the  Probate  Court  and  institution 
ordering  the  investigation,  and  if  his  report  is  on  file,  we  certify 
and  turn  it  over  to  the  Board  of  State  Auditors.  It  would  be  pre- 
sumptuous for  us  to  pass  upon  the  amount  of  time  that  the  county 
agent  spent  in  investigating  a  case.  So  far  as  the  Judge's  signature 
and  the  signature  of  the  secretary  of  this  board  are  concerned,  we 
can't  go  any  further  than  to  certify  that  the  county  agent  has  com- 
plied with  the  law  in  filing  those  claims  with  us. 

Mr.  Lord :  How  much  did  the  county  agency  system  cost  Michigan  last 
year? 

Mr.  Murray :     We  don't  keep  those  reports. 

Mr.  Thompson:  What  is  your  thought  as  to  the  future,  and  how  you 
benefit  the  state  by  your  work ;  what  changes  in  plan  of  operation 
will  work  a  benefit;  what  your  program  would  be  if  you  put  it 
through,  and  what  will  be  the  effect  of  war  and  prohibition  on  your 
work  ? 

Mr.  Murray :  Of  course,  we  have  not  as  yet  mapped  out  any  program  to 
present  to  the  legislature.  A  year  from  now  we  would  have  our 
plan  mapped  out. 

Mr.  Lord :  You  made  a  number  of  recommendations  last  year ;  what 
additional  recommendations;  can  you  get  at  it  that  way? 

Mr,  Thompson :    We  are  asking  you  these  questions  because  you  are  the 


245 

man  who  is  dealing  with  these  problems.     What,  in  your  opinion, 
is  or  will  be  the  effect  of  the  war  on  your  problems? 

Mr.  Murray :  I  don't  know  what  the  effect  will  be.  My  opinion  is  that 
it  will  increase  the  population  in  the  state  hospitals.  It  will  not 
have  any  effect  on  feeble-mindedness  and  epilepsy,  but  it  will  later 
increase  the  number  of" commitments  to  our  state  hospitals. 

Mr.  Thompson :     What  do  you  think  of  the  effect  of  prohibition  ? 

Mr.  Murray:  Now,  that  would  apply  to  the  population  of  county  jails, 
etc.  My  personal  opinion  is  that  prohibition  will  tend  to  decrease 
our  jail  and  prison  population. 

Mr.  Thompson :  What,  in  your  judgment,  will  reduce  the  population, 
which  is  dependent  upon  charity  or  public  aid? 

Mr.  Murray :     Do  you  mean  the  population  of  our  child  caring  agencies  ? 

Mr.  Thompson :     I  mean  all  indigents. 

Mr.  Murray:  I  believe  the  population  will  decrease  under  prohibition 
as  regards  these  classes  of  institutions. 

Mr.  Thompson :  What  do  you  regard  as  the  fundamental  cause  or  under- 
lying thing  that  increases  this  population  dependent  on  the  state; 
disease,  drunkenness,  or  what  ? 

Mr.  Murray :  I  don't  Ibelieve  there  has  been  any  increase  in  the  number 
in  the  county  infirmaries. 

ADVISORY  BOARD  IN  THE  MATTER  OF  PARDONS 

Mr.  Lord:  Dr.  Shumway,  will  you  make  a  statement  setting  forth  the 
activities  of  the  Pardon  Board ;  just  what  you  do,  what  your  duties 
are,  what  you  have  accomplished,  and  what  changes,  if  any,  you 
would  recommend  in  the  laws  relating  to  your  functions,  etc  ? 

Dr.  Shumway:  Well,  as  you  understand,  this  board  was  created  for 
the  purpose  of  taking  up  matters,  and  advising  the  Governor,  who 
hasn't  time  to  investigate  them,  of  parole,  pardon,  commutation  of 
sentence,  etc.  The  board  is  composed  of  three  members,  and  the 
executive  clerk  to  the  Governor  is  secretary  of  the  board. 
The  law  requires  this  board  to  meet  once  every  month  at  the  Jackson 
Prison,  Ionia  Reformatory,  and  the  Detroit  House  of  Correction, 
and  once  every  three  months  at  the  Branch  Prison  at  Marquette. 
The  indeterminate  sentence  law  gives  every  prisoner,  except,  of 
course,  life  men  who  are  in  for  murder,  the  right,  at  the  expiration  of 
their  minimum  sentence,  to  make  application  to  this  board  for 
release  or  pardon  or  parole.  In  the  early  days  of  the  pardon  board, 
back  in  1900,  the  average  number  of  cases  reviewed  at  each  monthly 
meeting  at  the  three  prisons  would  be  in  the  neighborhood  of  from 
fifteen  to  twenty,  possibly  twenty-five  cases.  At  the  present  time  our 
cases  will  average  some  fifty  to  sixty  at  most  every  meeting 
and  have  gone  as  high  as  eighty-two  cases  at  a  meeting.  These 
men  are  allowed  a  personal  interview,  the  files  are  gone  into,  and 
the  necessary  time  taken  to  thoroughly  investigate  all  the  facts 
surrounding  the  individual  case.  In  many  cases  it  is  necessary  to 
visit  the  locality  where  the  crime  was  committed  and  interview 
the  officers  and  others  conversant  with  the  facts  at  the  time  of  the 
commitment  of  the  crime,  so  that  with  our  increased  duties,  the  work 
of  the  board  is  much  greater  than  it  was  five  or  ten  years  ago. 
Mr.  Lord :  After  you  have  made  your  investigations  of  the  applicants 
for  parole  or  pardon,  what  do  you  do  then?  Have  you  the  authority 


246 

to  grant  the  parole  yourself,  or  is  it  a  matter  of  reference  to  the 
Governor? 

Dr.  Shumway:  If  they  have  served  their  mimimum  sentence,  it  is  up 
to  the  board  to  parole.  If,  in  the  judgment  of  the-  board  it  is  a 
matter  of  pardon  at  that  time,  we  recommend  to  the  Governor.  Many 
cases  come  to  us  before  the  minumum  has  expired  for  commutation 
of  sentences,  sometimes  through  recommendations  from  the  Judges 
themselves,  who  have  had  facts  come  to  them  after  the  trial  that 
convince  them  that  they  have  given  too  severe  a  sentence,  and  they 
recommend  that  the  minumum  be  commuted.  These  cases  go  to  the 
Governor;  he  alone  has  the  power  of  commuting  the  sentences.  But 
all  cases,  murder  cases  and  all,  the  Governor  has  not  the  time  to 
investigate  them,  and,  therefore,  he  refers  everything  to  the  board 
and  acts  on  our  recommendations. 

Mr.  Lord :     Dr.  Shumway,  how  many  cases  did  you  take  up  last  year? 

Dr.  Shumway:     2300. 

Mr.  Lord :  How  many  paroles  did  you  grant,  and  how  many  pardons 
and  commutations  of  sentences  did  you  recommend  to  the  Governor? 

Dr.  Shumway:  We  granted  1006  paroles  and  .recommended  31  com- 
mutations of  sentences  but  did  not  recommend  any  pardons. 
It  takes  more  time  now  for  the  hearings  at  the  prisons  than  it  used 
to;  for  instance,  the  time  taken  now  will  average  three  or  four  days 
at  Jackson,  whereas  one  day  used  to  be  sufficient.  We  are  allowed 
compensation  for  only  two  hundred  days  during  the  year,  so  that 
really  we  have  neglected  to  thoroughly  investigate  cases  where  it 
became  necessary  to  go  to  the  localities  where  the  crime  was  com- 
mitted, as  we  have  not  had  the  time  to  make  thorough  investigations. 
The  result  has  been  that  cases  have  had  to  be  carried  over. 

Mr.  Lord:     What  compensation  are  the  members  of  this  board  allowed? 

Dr.  Shumway :     $7.00  a  day,  limited  to  two  hundred  days. 

Mr.  Lord:  What  did  your  work  cost  last  year,  the  total  cost  of  the 
board  ? 

Dr.  Shumway:     $7,473.81. 

While  the  work  has  increased,  the  expense  of  the  Pardon  Board  for 
the  last  three  or  four  years  is  less  than  it  was  ten  years  ago  when 
I  was  on  the  Board. 

Mr.  Lord:  Don't  you  think  you  could  do  that  work  alone,  as  a  Parole 
Agent  for  the  Governor? 

Dr.  Shumway:  That  is  putting  a  great  responsibility  on  one  man.  I 
have  thought  of  this,  Mr.  Lord,  and  don't  know  as  it  would 
lessen  the  expense.  There  is  no  more  important  board  if  it  is  rightly 
administered.  If  the  Governor  had  one  good  representative  of  judg- 
ment and  experience ;  one  good  outside  man  and  the  warden  of  each 
institution,  acting  for  his  own  institution,  I  believe  this  would  be 
a  good  board  and  their  judgment  and  recommendations  would  be 
of  valuable  assistance  in  the  work.  This  has  been  talked  of  somewhat 
in  our  Penology  Commission  meetings.  Some  objected  to  the  Warden 
acting  on  such  a  board  on  account  of  discipline,  claiming  that,  where 
the  boys  know  that  the  warden  has  the  say,  that  it  will  hurt  the  disci- 
pline of  the  prison.  But  it  would  be  a  help.  From  the  warden  you 
would  get  information  as  to  the  conduct  of  the  prisoner  since  his 
entering  the  prison,  the  effect  of  his  confinement,  what  effect  it  has 


247 

had  on  him,  whether  there  is  any  evidence  of  reformation,  what  his 
conduct  has  been  and  whether  it  merits  clemency  at  that  time.  From 
the  outside  man  you  can  get  the  information  necessary  in  the  local- 
ities where  the  crime  was  committed ;  these  two  men  with  the  Gover- 
nor's representative,  I  believe  would  make  an  ideal  combination, 

Mr.  Lord :  You  would  have  the  warden  of  the  prison  act  with  yourselt 
and  the  executive  clerk,  for  instance,  in  his  own  institution  ? 

Dr.  Shumway:     Yes,  sir. 


MICHIGAN  FISH  COMMISSION 

Mr.  Lord:  Mr.  Bower,  you  are  the  Superintendent  of  the  Fish  Com- 
mission ? 

Mr.  Bower:     Yes  sir. 

Mr.  Lord:  Will  you  state  in  a  general  way,  as  briefly  as  possible,  the 
various  activities  of  the  Fish  Commission — what  it  is  doing  now, 
what  it  has  done,  and  what  it  proposes  to  do  in  the  future  ? 

Mr.  Bower:  Prior  to  1896  the  Fish  Commission  hatched  what  we  call 
commercial  fish,  as  well  as  fish  of  inland  waters.  We  had  hatch- 
eries at  Detroit  and  one  at  the  Soo  and  a  temporary  hatchery  at 
Charlevoix  where  we  hatched  white  fish,  but  in  1893  the  Commission 
got  into  a  big  row  with  the  commercial  fishery  and  they  tried  to 
abolish  the  Fish  Commission,  and  it  did  succeed  in  taking  away  the 
appropriation  for  commercial  fish. 

Mr.  Lord :     What  was  the  nature  of  the  opposition  ? 

Mr.  Bower :  The  President  of  the  Board,  Mr.  Whitaker,  urged  excessive 
restrictive  laws  that  would  absolutely  do  away  with  commercial  fish. 
The  result  was  that  the  commercial  fishery  attacked  the  fish  com- 
mission, justly,  I  think.  They  took  away  our  appropriation  and  no 
appropriation  was  made  for  four  years.  Then  the  United  States 
Fish  Commission  stepped  in  and  said  that  if  we  would  lease  our 
hatcheries  to  them,  that  they  would  operate  them  and  it  wouldn't 
cost  the  state  a  cent.  Of  course,  with  that  proposition  before  us,  we 
could  not  get  an  appropriation  and  never  have  gotten  one  since. 

Mr.  Lord:  Have  you  any  more  than  the  Detroit  hatcheries  that  are 
leased  to  the  Federal  Government? 

Mr.  Bower:  One-half  of  the  Soo  Hatchery  is  also  leased  to  it.  Since 
that  time  our  work  has  been  confined  to  inland  waters,  or  practi- 
cally so.  We  have  sometimes  put  them  in  the  St.  Mary's  and  in  the 
Detroit  rivers. 

Mr.  Lord:     Are  the  commercial  fishermen  licensed  in  any  way? 

Mr.  Bower :  The  Game  Warden's  department  has  charge  of  that.  They 
have  a  boat  license. 

Mr.  Lord :  In  your  work  is  there  any  duplication  of  effort  so  far  as  the 
Fish  Commission  and  the  Game  Wardens'  department  is  concerned? 

Mr.  Bower:  No,  not  especially  so.  Off-hand  I  do  not  recall  any  dup- 
lication, although  I  think  myself — it  is  my  own  personal  opinion — 
that  the  two  departments  should  be  united.  We  could  help  them  and 
they  could  help  us. 

Mr.  Lord:     In  what  way  should  it  be  united? 

Mr.  Bower:     To  consolidate  the  fish  commission  with  them  under  one 


248 

head,  although  I  think  the  work  of  the  two  departments  should  be 
kept  separate  as  much  as  possible.  However,  with  one  non-salaried 
board,  say  five  men,  two  could  have  charge  of  the  fish  commission, 
two  oversee  the  game  warden  department's  activities,  and  one  act  as 
Secretary. 

Mr.  Lord :     Do  you  think  that  it  would  save  the  State  any  money? 

Mr.  Bower :     I  don't  know  that  it  would  save  the  State  any  money. 

Mr.  Lord :     What  benefit  would  there  be  then  in  the  consolidation  ? 

Mr.  Bower:  Well,  of  course,  the  warden's  department  has  deputies 
scattered  throughout  the  state.  If  they  were  under  our  control  we 
could  utilize  them  by  having  them  plant  fish  and  do  field  work  of  one 
kind  or  another.  We  have  only  five  hatcheries  and  in  some  parts  of 
the  State  we  are  not  represented  at  all. 

Mr.  Lord :  You  think  by  getting  the  services  of  the  employes  of  the  game 
department,  you  would  be  able  to  dispense  with  the  services  of  some 
of  the  employes  of  your  department? 

Mr.     Bower :     No,  I  don't  think  so. 

Mr.  Lord:  Do  you  mean  that  you  would  use  them  in  addition  to  your 
present  employes? 

Mr.  Bower:  Yes,  you  see  our  men  plant  no  fish  now  to  speak  of.  They 
simply  operate  the  hatcheries  and  collect  the  eggs  and  do  work  of 
that  kind. 

Mr.  Lord :  Then  there  would  not  be  any  benefit  from  an  economic  stand- 
point by  a  consolidation  of  the  two  departments? 

Mr.  Bower:  There  would  not  be  a  great  deal  but  it  would  increase  the 
efficiency. 

Mr.  Lord :  Where  you  increase  the  efficiency,  Mr.  Bower,  don't  it  result 
in  the  saving  of  money? 

Mr.  Bower :     Either  that  or  produces  more  fish. 

Mr.  Lord :  We  would  get  larger  and  better  results  from  the  same 
money  ?  t 

Mr.     Bower :     Yes. 

Mr.  Lord:     Now,  Mr.  Bower,  what  are  your  plans  for  the  future? 

Mr.  Bower:  Well,  we  want  to  go  on  along  much  the  same  lines  that  we 
are.  We  would  like  to  expand — the  demand  for  fish  is  way  beyond 
our  producing  capacity. 

Mr.  Lord :     What  appropriation  did  you  have  for  the  last  two  years? 

Mr.  Bower:     1914  $52,007.00 

1915  49,177.00 

1916  57,056.00 

1917  47,241.00 

The  last  session  appropriated  for  the 

fiscal  year  ending  1918  68,184.00 

Mr.  Lord :     For  what  purpose  was  that  increase  asked  ? 
Mr.  Bower:     To  increase  our  output  and  build  more  ponds.    We  build 

a  pond  or  two  every  year  or  so.    The  appropriation  granted  us  for 

1919  is  158,309.00 
Mr.  Lord :     What  particular  benefit  is  this  spawning  of  fish  to  the  people 

of  the  State — I  mean  the  general  public  ? 
Mr.  Bower:     Well,  it  is  to  keep  up  and  increase  the  supply  of  fish.    Of 

course,  in  this  State,  for  example,  there  were  no  brook  trout  in  the 

greater  part  of  the  Lower  Peninsula  until  they  were  planted.    The 


249 

southern  limit  was  Boardman  River.  This  was  also  true  as  to  Rain- 
bow trout. 

Mr.  Lord:  Does  the  general  public  reap  any  benefit  at  all  from  the 
spawning  of  these  fish,  or  isn't  the  benefit  confined  to  the  sports- 
men and  fishermen? 

Mr.  Bower:  That  is  true  to  a  considerable  extent  as  regards  trout,  but 
we  are  planting  bass,  perch,  blue-gills,  and  other  fish. 

Mr.  Lord :     What  per  cent  of  the  general  public  reap  any  benefit  ? 

Mr.  Bower:  There  are  certain  benefits  that  you  can't  perhaps  value  in 
dollars  and  cents. 

Mr.  Lord:     What  are  they? 

Mr.  Bower:     Well,  for  instance,  the  outing  and  recreation. 

Mr.  Lord:  You  think  the  general  taxpayers  of  the  state  should  have 
to  pay  for  the  outing  and  recreation  of  sportsmen  and  fishermen  ? 

Mr.  Bower:  WTell,  the  fair  way  to  do  it  would  be  to  pay  every  dollar 
out  of  the  license  fund.  If  every  man  over  twenty-one  years  of  age 
would  pay  one  dollar  a  year,  it  would  give  us  more  money  than  we 
are  getting  now  and  we  would  hatch  more  fish  and  it  wouldn't  cost 
•  the  taxpayers  a  cent,  and  nobody  would  have  to  pay  unless  they 
fished. 

Mr.  Lord :  Wouldn't  the  enforcement  of  that  law  and  the  collection  of 
the  tax  cost  as  much  as  if  the  legislature  made  an  appropriation? 

Mr.  Bower:     I  do  not  think  it  would  cost  very  much. 

Mr.  Lord:  Wouldn't  the  result  of  a  license  tax,  as  you  propose,  shut 
out  a  lot  of  poor  people  from  the  privilege  of  catching  the  fish? 
Would  it  not  result  in  sort  of  a  close  corporation,  consisting  mostly 
of  sportsmen  and  fishermen? 

Mr.  Bower:  Under  our  law  all  the  fish  that  are  in  the  public  waters 
belong  to  the  State  of  Michigan.  Now,  if  a  man  helps  himself  to 
state  property.,  I  don't  see  why  he  shouldn't  contribute  to  the  main- 
tenance of  that  property.  However,  if  the  Superintendent  of  the 
Poor  should  make  a  statement  that  such  a  man  should  have  a  free 
license,  I  would  give  it  to  him. 

Mr.  Lord:  Couldn't  we  carry  it  much  farther  and  say  that  the  state 
should  engage  in  raising  seed  for  the  farmers? 

Mr.  Bower:  That  is  a -different  proposition.  You  can  control  land  and 
can  buy  it.  You  can't  buy  public  waters  and  no  one  man  is  going  to 
see  that  the  waters  are  stocked  with  fish.  It  has  to  be  done  by  the 
state. 

Mr.  Lord:  How  many  states  are  engaged  in  the  same  kind  of  business 
on  such  a  wide  stretch  as  this  state  is  ? 

Mr.  Bower:  New  York  has  a  considerable  larger  appropriation  than 
we  get. 

Mr.  Lord:     Well,  New  York  is  a  larger  state. 

Mr.  Bower:  We  have  far  more  waters  than  New  York.  Pennsylvania 
has  a  larger  appropriation  than  we.  Wisconsin  does  and  also  Cali- 
fornia. 

Mr.  Lord :  Have  these  three  states  that  you  mentioned  a  Board  of  Fish 
Commissioners  that  control  these  matters? 

Mr.  Bower:  Every  state,  nearly,  has  a  different  way  of  handling  it.  In 
the  state  of  New  York  they  have  a  conservation  commission,  by 
which  the  protection  of  forestry  work,  etc.,  is  also  taken  care  of. 


250 

Mr.  Lord:     Then  that  appropriation  of  which  you  speak  in  New  York 

covers  more  things  than  fish  culture. 

Mr.  Bower:     They  devote  more  money  than  we  do  to  fish  culture. 
Mr.  Lord :     Are  these  the  only  three  states  that  have  any  control  what- 
ever of  the  fish  culture? 
Mr.  Bower:     Nearly  every  state  has  a  fish  commission.     There  may  be 

a  few  that  have  not.     South  Carolina  hasn't. 
Mr.  Lord :     What  does  it  cost  per  unit  to  spawn  ? 
Mr.  Bower:     You  couldn't  fix  a  standard  for  that.    The  same  effort  one 

year  would  not  get  you-  the  same  production  that  the  same  effort 

another  year  would  get  you. 
Mr.  Lord:     Can  you  give  us  an  average  for  a  period  of,  say  five  or  ten 

years  ? 
Mr.  Bower:     You   mean   the   fish  as  they   are   shipped   out,   ready   to 

deliver  ? 

Mr.  Lord :     Yes,  tell  us  that. 
Mr.  Bower :     That  is  a  hard  thing  to  figure.    Off-hand,  I  should  say  that 

brook  trout  put  out  would  cost  $1.50  to  |2.00  a  thousand.    Rainbow 

trout,  probably  not  quite  as  much  because  we  get  aid  from  wild  fish. 

We  do  keep  a  planted  stock,  but  get  a  good  many  eggs  outside.    Bass, 

all  sizes,  would  cost  two  to  three  dollars  a  thousand. 
Mr.  Lord :     Where  you  receive  an  application  for  planting  fish,  what  is 

the  nature  of  the  investigation  you  make? 
Mr.  Bower:     We  have  application  blanks  that  are  filled  out. 
Mr.  Lord :     Do  you  take  the  word  of  the  applicant  or  do  you  follow 

it  up? 
Mr.  Bower:     We  don't  follow  it  up.    In  a  great  many  cases  these  waters 

are  well  known  to  us  and  we  have  maps,  etc.,  to  go  by. 
Mr.  Lord:     Isn't  there  considerable  danger  of  more  or  less  waste  where 

you  fail  to  make  a  personal  investigation? 
Mr.  Bower:     No,  not  if  they  plant  according  to  instructions. 
Mr.  Lord:     No,  but  you  don't  know  that  they  do   plant  according  to 

instructions  if  you  don't  investigate. 
Mr.  Bower:     We  have  a  certificate,  certifying  that  they  have  planted  the 

fish  as  per  instructions,  but  of  course  some  men  will  certify  to  a 

falsehood,  no  doubt. 

Mr.  Lord:     Especially  if  they  want  the  fish. 
Mr.  Bower:     We  have  found  that  Ihey  will  take  fish  supplies  from  one 

water  and  put  them  in  another  water. 
Mr.  Lord  :     Now,  isn't  it  a  fact,  Mr.  Bower,  that  in  a  number  of  instances 

where  you  have  fish  for  planting  that  they  have  never  left  the  station 

and  have  spoiled  before  planting? 
Mr.  Bower:     No,  not  in  very  many  cases.     Our  men  are  instructed  not 

to  leave  fish  unless  a  man  is  there  to  get  them.     Of  course,  every 

man  is  requested  to'go  immediately  and  he  may  not  do  it;  he  may 

go  up  town  to  do  some  trading,  but  in  most  cases  they  are  just  as 

anxious  to  get  results  as  we  are  to  have  them. 

Mr.  Lord:     Do  the  applications  for  fish  for  planting  come  to  this  office? 
Mr.  Bower :     Yes.  sir. 
Mr.  Lord :     Then  what  do  you  do  ? 
Mr.  Bower :     We  enter  them  into  a  record  here  in  this  office  and  number 

them.    Then  we  file  them  away  by  counties  and  get  out  the  applica- 


251 

tion  for  the  same  waters  and  if  there  is  more  than  one  application 

for  fish  to  be  placed  in  the  same  stream,  one  or  the  other  application 

is  thrown  out  in  order  to  avoid  duplication. 
Mr.  Lord :     About  how  many  applications  do  you  receive  during  the 

year? 
Mr.  Bower :     We  get  in  the  course  of  a  year  considerably  above  5,000 

applications.     I  don't  mean  to  say  that  we  have  5,000  new  blanks, 

because  a  good  many  write  in  asking  to  have  their  applications  for 

the  last  year  renewed. 
Mr.  Lord :     When  you  have  approved  all  applications,  do  you  designate 

some  particular  place,  like  Paris  Station,  to  ship  the  fish? 
Mr.  Bower:     The  applications  are  held  until  the  particular  kind  of  fish 

are  ready  to  go  out.    Then  we  make  a  skeleton  copy  which  we  retain 

here  and  send  the  other  copy  to  the  station  from  which  the  fish  are  to 

be  shipped. 
Mr.  Lord :     Then    the   hatchery   reports   to   you   that   they   have   been 

shipped  ? 
Mr.  Bower:     Yes,  sir,  we  get  monthly  reports  from  all  hatcheries.    Tf  a 

man  fails  to  reply  to  his  notice,  we  don't  ship  the  fish.     If  he  does 

reply  and  fails  to  get  the  fish  we  give  them  to  someone  else,  or  carry 

them  on  and  deliver  them  ourselves.    That  is  why  we  give  a  copy  to 

the  man  in  charge  of  the  fish. 

Mr.  Lord :     Do  you  supply  many  fish  to  private  waters  ? 
Mr.  Bower :     Not  knowingly. 

Mr.  Lord :     How  do  you  tell  that  they  are  not  in  private  waters  ? 
Mr.  Bower:     We  have  a  man  to  take  his  declaration  that  they  are  public 

waters.    That  is,  we  don't  plant  any  fish  in  any  waters  that  are  not 

open  to  the  public 
Mr.  Lord:     Now,  Mr.  Bower,  I  notice  in  your  statement  that  in  1914- 

1915,  you  collected  $40,000.00  in  non-resident  licenses.    What  disposi- 
tion do  you  make  of  these  funds  when  you  collect  them  ? 
Mr.  Bower:     Well,  we  use  them  for  a  variety  of  purposes.     We  use 

about  |8,000.00  a  year  to  buy  brook  trout  eggs. 
Mr.  Lord:     Do  you  keep  the  money  here  in  a  bank  or  is  it  turned  over 

to  the  State  Treasury? 
Mr.  Bower:     We  turn  the  money  over  to  the  Treasurer  of  the  board  and 

he  turns  it  over  to  the  State  Treasury.     He  is  supposed  to  turn  it 

it  over  shortly  after  the  end  of  each  year. 
Mr.  Lord :     So  that  from  $20,000.00  to  $25,000.00  a  year  is  in  the  hands 

of  the  commission  until  the  end  of  the  year? 
Mr.  Bowers :     Yes,  sir,  it  is  in  the  hands  of  the  Treasurer.    The  fees  are 

all  turned  over  to  the  state  at  the  end  of  each  fiscal  year. 
Mr.  Lord:     You  collected  f 21,279.00  in  1917  up  to  November  21st.    Now 

do  you  actually  turn  over  that  money  to  the  State  Treasury  or  does 

your  Treasurer  turn  in  the  balance  left  after  some  expenditures  are 

made? 

Mr.  Bower :     All  except  refunds  for  licenses  as  shown. 
Mr.  Lord :     Why  does  he  want  it  in  his  hands  until  the  end  of  the  fiscal 

year? 

Mr.  Bower :     I  cannot  tell  you. 

Mr.  Lord:     Can  you  tell  me  where  the  money  is  deposited? 
Mr.  Bower:     I  think  with  the  Central  Savings  Bank,  Detroit. 


Mr.  Lord :    Have  you  any  record  here  of  interest  on  these  deposits  ? 

Mr.  Bower:     No,  sir. 

Mr.  Lord :     You  really  don't  know  whether  the  fish  commission  gets  any 

interest  or  not? 
Mr.  Bower:     There  is  none  passing  through  here.     If  it  did  we  would 

know  it. 

Mr.  Lord:     You  have  no  record  whatever  of  interest  on  deposits? 
Mr.  Bower:     No,  sir,  none  whatever. 
Mr.  Lord :     Can  you  tell  me  about  what  the  average  balance  is  on  deposit 

in  the  banks?    That  is,  what  is  your  daily  balance  belonging  to  the 

fish  commission,  or  to  the  state? 
Mr.  Bower:     Well,  at  the  end  of  every  month  it  would  run  five,  six, 

eight  or  nine  thousand  dollars.    Then  when  the  pay  roll  is  paid  it 

pulls  it  down  and  it  is  built  up  again  from  appropriation.     The 

Angler's  License  Fund,  however,  we  don't  touch  until  it  is  turned 

into  Lansing  st  the  end  of  the  year. 

Mr.  Lord :     Then  you  have  it  for  use  the  next  fiscal  year  ? 
Mr.  Bower:     Yes.     Last  year,  after  the  audit  by  the  Auditor  General's 

Department  in  April,  we  turned  in  f 8,000.00.    Then  the  license  funds 

began  to  accumulate,  for,  of  course,  the  bulk  comes  in  during  July, 

August  and  September. 
Mr.  Lord:     I  notice  that  you  had  an  appropriation  for  a  new  hatchery 

in  Schoolcraft  county.    What  is  the  reason  for  this? 
Mr.  Bower:     That  hatchery  was  put  through  by  Senator  Wood  because 

he  wanted  one  in  that  county.    We  approved  it  because  it  is  all  right. 

The  money  has  not  been  drawn  from  Lansing  as  we  are  having 

trouble  about  the  site. 

Mr.  Lord:     Is  it  necessary  to  have  so  many  hatcheries? 
Mr.  Bower:     Absolutely. 
Mr.  Lord :     Why  do  we  lease  any  hatcheries  to  the  Federal  Government 

when  we  need  more  for  the  state? 

Mr.  Bower:     Because  they  are  used  for  commercial  fish. 
Mr.  Lord:     Is  that  granting  a  favor  to  commercial  fishermen? 
Mr.  Bower:     You  could  not  use  this  hatchery  down  here  for  hatching 

bass.     It  is  a  different  water. 

Mr.  Lord:     Was  it  built  for  commercial  fish  purposes? 
Mr.  Bower:     Yes,  sir.    Of  course  you  can  hatch  wall-eyed  pike. 
Mr.  Lord :     Is  it  true  of  the  Soo  hatchery  ? 
Mr.  Bower :     It  is  true  of  one-half  of  it.    One-half  is  used  for  hatching 

white  fish. 

Mr.  Lord :     Could  it  all  be  used  for  lake  trout  ? 
Mr.  Bower:     It  would  cost  more  than  f 5,000.00  to  fix  it  and  then  you 

couldn't  hatch  brook  trout. 
Mr.  Lord :     You  say  the  part  used  by  the  Federal  Government  could  be 

changed  ? 
Mr.  Bower :     We  could  use  it  just  as  it  is  for  white  fish  and  lake  trout. 

You  couldn't  use  it  for  hatching  bass,  blue  gills,  etc. 
Mr.  Lord:     How  much  would  it  cost  to  change  the  hatchery  here  in 

Detroit  for  state  purposes? 
Mr.  Bower:     You  couldn't  utilize  this  hatchery  except  for  the  kind  of 

fish  we  hatch  there  now.     The  fault  is  with  the  water. 
Mr.  Thompson  :     Couldn't  you  use  it  for  some  other  kind  of  fish  ? 


268 

Mr.  Bower:  Well,  wall-eyed  pike  and  it  could  be  equipped  for  lake 
trout. 

Mr.  Thompson:  Could  it  be  easily  equipped  to  hatch  any  other  kind, 
used  in  inland  waters? 

Mr.  Bower:     No,  sir. 

Mr.  Lord :     State  the  kinds  of  fish  that  you  hatch,  Mr.  Bower. 

Mr.  Bower:  Brook  trout,  rainbow  trout,  lake  trout,  small  bass,  large 
bass,  blue  gills,  perch  and  wall-eyed  pike.  That  practically  covers  it. 

Mr.  Thompson :  Is  your  demand  for  wall-eyed  pike  fully  covered  by 
present  facilities? 

Mr.  Bower:  We  can  take  care  of  wall-eyed  pike  better  than  any  other 
kind  of  fish. 

Mr.  Lord :  Would  it  not  be  advisable  to  cancel  this  lease  and  supply 
the  state  with  wall-eyed  pike? 

Mr.  Bower:  The  government  is  going  to  quit  it  anyway.  We  will  have 
it  on  our  hands  in  a  few  months. 

Mr.  Lord :     You  won't  need  any  appropriation  for  wall-eyed  pike  ? 

Mr.  Bower:     No,  sir. 

Mr.  Lord :  What  we  are  trying  to  get  at,  Mr.  Bower,  is  whether  or  not 
you  could  do  with  a  less  number  of  hatcheries  ? 

Mr.  Bower:  The  fact  is,  what  the  state  needs  to  keep  up  its  fish  sup- 
plies is  a  hatchery  for  every  three  or  four  counties.  A  hatchery  where 
we  would  not  have  flower  beds,  etc.,  but  a  small  station  where  you 
could  plant  your  own  fish  and  then  you  could  keep  the  lakes  very  well 
stocked. 

Mr.  Lord :  What  would  be  the  result  if  there  was  no  planting  of  fish  at 
all  and  a  law  enacted  restricting  the  catching  of  fish  ? 

Mr.  Bower :     I  think  that  there  would  always  be  some  fish. 

Mr.  Lord:  Would  the  general  public  get  as  many  fish  as  they  are 
getting  now? 

Mr.  Bower:  Oh,  no.  There  is  a  large  demand  on  the  part  of  the 
general  public  for  trout,  for  instance. 

Mr.  Lord :     Isn't  the  demand  greater  for  commercial  fish  ? 

Mr.  Bower:  We  have  a  larger  number  of  applications  for  lake  fish 
than  for  brook  trout.  The  kinds  of  fish  that  we  need  to  hatch  more 
and  more,  and  the  demand  is  constantly  increasing  for,  are  the  lake 
fish.  We  come  nearer  to  supplying  the  demand  for  brook  trout  and 
rainbow  trout,  wall-eyed  pike,  perch,  etc.,  than  we  do  for  the  lake 
fish. 

Mr.  Lord :  Mr.  Bower,  who  makes  the  appraisal  of  these  properties  that 
the  fish  commission  has  control  of? 

Mr.  Bower:  Years  ago  I  used  to  go  around  and  go  over  the  grounds 
with  the  local  superintendent  myself,  but  recently  I  either  take 
their  word  for  it  or  go  over  it  after  the  final  review  is  done. 

Mr.  Lord:  Now,  Mr.  Bower,  I  notice  in  your  payroll  that  you  have  a 
number  of  employes  at  the  Detroit  Station.  Why  is  that  necessary 
if  it  is  under  the  Federal  Government? 

Mr.  Bower:  We  operate  it  for  wall-eyed  pike  in  the  spring.  That 
requires  one-half  dozen  men  or  sometimes  more  for  a  short  time.  A 
part  of  the  payment  we  get  for  use  of  this  hatchery  is  from  the  Gov- 
ernment. They  turn  over  a  certain  number  of  wall-eyed  pike  to  us 
according  to  the  success  they  have  in  making  collection. 


254 

Mr.  Lord :  Is  that  all  you  get  from  the  Federal  Government  for  this 
lease  ? 

Mr.  Bower :     They  pay  the  current  rent  and  keep  it  in  repair. 

Mr.  Lord  :     The  state  does  not  own  the  grounds  ? 

Mr.  Bower :  They  lease  the  ground  for  $425.00  a  year.  They  have  paid 
that  and  kept  it  in  good  repair.  At  the  Soo  hatchery  they  pay  the 
overseer  for  two  months  and  one  man  for  two  months  and  then  they 
put  on  extra  help  to  take  care  of  their  part  of  the  work.  We  get  a 
good  bargain  as  far  as  that  is  concerned. 

Mr.  Lord:  Another  thing  in  connection  with  the  payroll  is  that  the 
same  names  are  on  your  payroll  for  different  stations  for  the  same 
month.  How  does  that  happen? 

Mr.  Bower :  We  shift  our  men  around  a  good  deal.  We  charge  the  dif- 
ferent hatcheries  for  the  time  they  spend  there. 

Mr.  Lord :  Do  you  think  that  the  employment  of  all  these  men  is  abso- 
lutely necessary  to  carry  on  your  work? 

Mr.  Bower:  Yes,  sir;  we  could  not  dispense  with  any  of  them.  Our 
men  are  employed  and  work  on  their  merits. 

Mr.  Lord :  What  is  the  nature  of  their  work  ?  What  do  they  do  ?  For 
instance,  give  us  a  day's  work. 

Mr.  Bower:  It  depends  entirely  upon  the  season.  At  Paris  Station, 
for  instance,  there  are  fish  to  feed,  screens  to  clean,  eggs  to  be  col- 
lected, young  fry  to  be  shipped,  and  current  repairs  to  be  attended 
to.  I  was  up  there  last  week  and  went  through  the  woods  surround- 
ing the  grounds  and  found  a  lot  of  down  timber  not  valuable  timber, 
that  will  be  wasted  unless  it  is  cut  into  wood,  so  I  told  them  to  put 
a  crew  of  three  or  four  men  on  and  save  the  wood.  If  we  don't  need 
it  we  can  sell  it  for  more  than  it  costs.  Then  another  thing,  when 
we  are  putting  out  fish  we  send  a  great  many  out  by  special  mes- 
sengers. The  same  way  at  Mill  Creek  and  Drayton  Plain  station. 

Mr.  Lord:     Which  is  your  largest  station? 

Mr.  Bower:  Well,  Paris  and  Mill  Creek  are  really  the  most  important 
stations. 

Mr.  Lord:     Harrietta  is  not  very  large? 

Mr.  Bower :     It  is  a  new  station. 

Mr.  Lord :     You  had  more  employes  there  than  at  the  other  stations. 

Mr.  Bower:  We  may  have  been  doing  some  special  work.  They  are 
really  all  engaged  in  the  same  character  of  work,  outside  of  the  work 
covered  by  special  appropriation  such  as  building  ponds,  etc. 

Mr.  Lord:     These  hatchery  superintendents  are  all  capable,  are  they? 

Mr.  Bower :  Our  hatchery  superintendents  are  all  experienced.  I  don't 
know  how  many  years  Mr.  Marx  at  the  Paris  Station  has  been  with 
us.  I  have  been  here  twenty-five  years  and  he  was  here  when  I  came, 
also  Mr.  Lydell  of  Mill  Creek.  The  man  at  Drayton  Plains  has 
been  there  eighteen  years.  Mr.  Lydell  is  assistant  superintendent 
and  is  stationed  at  Mill  Creek. 

Mr.  Lord:     Do  you  have  an  assistant  superintendent  at  each  station? 

Mr.  Bower :     No,  we  call  them  overseers. 

Mr.  Lord :     Does  Mr.  Lydell  do  any  work  here  in  your  office  ? 

Mr.  Bower:  No,  it's  this  way:  A  number  of  years  ago  Mr.  Lydell  was 
offered  a  position  with  another  state  at  a  salary  of,  I  think,  $2,500.00 
a  year.  At  that  time  we  were  paying  him  $100.00  a  month.  We 


255 

didn't  want  to  lose  him  and  he  really  didn't  want  to  go.  Finally,  he 
said  he  would  stay  if  we  would  make  his  salary  so  much,  not  as 
much  as  it  is  now,  and  we  did  but  in  order  to  do  so  and,  in  order  that 
the  other  hatchery  superintendents  would  not  expect  the  same  salary 
he  was  getting,  they  created  the  position  of  Assistant  Superin- 
tendent. 

Mr.  Lord :     What  do  you  pay  him  now  ? 

Mr.  Bower :    We  pay  him  $140.00  a  month. 

Mr.  Lord :     You  think  he  is  really  worth  that  much  ? 

Mr.  Bower :     I  know  where  he  can  get  f  3,000.00  a  year  now. 

Mr.  Lord:     Who  is  Harold  Bower? 

Mr.  Bower :  He  is  my  son,  and  is  clerk  here  in  the  office.  He  takes  care 
of  the  Angler's  License  funds  and  does  clerical  work. 

Mr.  Lord :     How  many  clerks  have  you  in  the  office  ? 

Mr.  Bower:     We  have  two  clerks  here. 

Mr.  Lord:     What  do  you  pay  them? 

Mr.  Bower :     We  pay  them  each  $20.00  a  week. 

Mr.  Lord  ^  In  the  matter  of  equipment,  do  you  think  you  need  any  new 
equipment  of  any  kind  at  any  of  your  hatcheries,  or  in  the  office? 

Mr.  Bower :  Why,  there  is  no  limit,  of  course,  to  the  amount  of  expan- 
sion. 

Mr.  Lord:  I  am  not  talking  of  expansion.  Just  your  present  stations 
and  offices. 

Mr.  Bower:  No,  nothing  now,  I  guess.  We  are  pretty  well  provided 
for. 

Mr.  Lord :  You  don't  think  you  will  need  any  special  appropriation  next 
year? 

Mr.  Bower :     Not  unless  we  expand. 

Mr.  Lord:  Can  you  tell  us  what  per  cent  of  the  people  in  the  state 
make  application  for  fish  to  plant? 

Mr.  Bower:  It  is  pretty  hard  to  say.  We  get  a  great  many  applica- 
tions from  clubs. 

Mr.  Lord:     What  kind  of  clubs? 

Mr.  Bower:     Angling  clubs,  sporting  clubs,  etc. 

Mr.  Lord :     Most  of  them  come  from  clubs  ? 

Mr.  Bower :     No,  I  would  not  say  most  of  them ;  a  great  many  of  them  do. 

Mr.  Lord:  You  say  you  couldn't  tell  us  what  per  cent?  You  have  a 
record  of  the  applications  you  receive  for  fish  for  planting.  How 
many  did  you  receive  last  year? 

Mr.  Bower:  We  have  probably  around  five  thousand  a  year  on  an 
average. 

Mr.  Lord:  So  that  the  per  cent  of  the  population  is  very  small  that 
makes  application  for  fish? 

Mr.  Bower :  We  get  more  applications  than  that.  A  great  many  are 
duplicates  and  we  throw  them  away,  of  course.  Many  apply  for  fish 
for  waters  that  run  through  several  counties. 

Mr.  Lord:  Of  this  five  thousand  you  receive,  how  many  come  from 
clubs? 

Mr.  Bower :     I  should  say  that  perhaps  one-third. 

Mr.  Lord :  What  is  the  nature  of  the  other  applications?  Who  are  they 
generally  from  ? 

Mr.  Bower:     Well,  from  a  variety  of  people. 


256 

Mr.  Lord:     People  noted  for  sportsmanship? 

Mr.  Bower:  Yes,  a  good  many,  and  we  get  a  good  many  from  farmers, 
sportsmen's  clubs,  etc. 

Mr.  Lord:  Are  the  applications  from  farmers  for  the  purpose  of  get- 
ting fish  for  private  waters  ? 

Mr.  Bower:  WeJl,  I  suppose  in  some  cases  that  is  so,  but  he  has  to 
certify  that  the  water  is  open  to  the  public. 

Mr.  Lord:     About  how  many  farmers  make  application,  five  hundred? 

Mr.  Bower:  Oh,  more  than  that  out  of  the  five  thousand,  and  a  great 
many  more  of  them  are  interested  in  this  way.  People  in  villages, 
sportsmen,  apply  for  fish  for  a  lake  or  stream  and  get  some  farmer 
to  come  to  the  station  and  get  the  fish. 

Mr.  Lord:     How  many  licenses  did  you  issue  to  non-residents? 

Mr.  Bower:     About  twenty-five  thousand. 

Mr.  Lord :     What  do  they  pay  ? 

Mr.  Bower:  They  pay  one  dollar  for  the  license.  That  allows  them  to 
fish  for  everything  but  trout.  Trout  license  is  $3.00  and  when  they 
have  a  trout  license,  that  covers  everything.  The  last  legislature 
raised  the  trout  fee  to  $5.00  against  my  protest.  I  think  it  was  a 
mistake.  The  great  bulk  of  the  license  money  comes  from  the  one 
dollar  license.  We  get  one-third,  yes,  nearly  one-half,  on  the  licenses 
issued  in  the  two  border  tier  of  counties  in  the  south  part  of  the 
state.  From  ten  to  fifteen  per  cent  of  every  dollar  we  get  comes 
from  Cass  county. 

Mr.  Lord  :  Mr.  Bower,  what  steps  or  methods  do  you  take  to  enforce  the 
law? 

Mr.  Bower:  We  have  nothing  to  do  with  enforcing  the  law.  It  is  done 
by  the  Game  Warden's  Department, 

Mr.  Lord:  So,  as  far  as  you  know,  two  thousand  people  might  be  fishing 
without  paying  licenses? 

Mr.  Bower:     There  might  be. 

Mr.  Lord:  The  Board  of  Fish  Commissioners  collects  the  revenue  from 
the  issued  licenses  -uid  the  Game  Warden's  Department  has  charge 
of  enforcing  the  law. 

Now,  you  speak  of  having  a  number  of  small  hatcheries.  Can  you 
tell  us  approximately  what  a  small  hatchery  would  cost  if  you 
standardized  them  throughout  the  state.  What  the  cost  would  be 
of  an  ideal  small  hatchery  ? 

Mr.  Bower:  I  think  hatcheries  such  as  I  have  in  mind  could  be  estab- 
lished on  an  average  of  from  five  to  eight  thousand  dollars  a  piece. 
Possibly  ten  in  some  locations. 

Mr.  Lord:  After  you  had  established  such  hatcheries,  what  would  be 
the  annual  cost  of  maintaining  one? 

Mr.  Bower:  The  way  I  would  run  it,  it  would  cost  not  to  exceed 
15,000.00  a  year.  I  would  run  it  in  a  semi-wild  condition,  not  as  a 
park.  I  would  not  have  flower  beds  or  any  of  those  frills  connected 
with  the  hatcheries  now. 

Mr.  Lord:  The  hatcheries  are  maintained  in  quite  nice  shape,  are  they? 
Does  that  require  much  help  to  take  care  of  the  shrubberies,  etc.  ? 

Mr.  Bower:  It  requires  one  man  at  every  station  and  there  are  times 
when  he  has  to  have  a  little  help. 

Mr.  Lord:     You  think  that  could  be  dispensed  with? 


257 

Mr.  Bower:  I  don't  know  as  to  those  that  are  established,  as  to  their 
being  dispensed  with,  but  there  is  a  reason  for  it  too.  I  have  noticed 
that  when  the  committee  from  the  legislature  goes  around  to  look 
at  these  stations  they  judge  from  the  general  appearance  of  things. 
The  station  that  looks  the  nicest  is  the  one  that  is  likely  to  get  the 
most  money,  not  the  one  that  is  the  most  efficient. 

Mr.  Thompson :  Tt  would  cost  about  $2,000.00  a  county  to  maintain 
these  small  hatcheries  a  year. 

Mr.  Bower :  Yes,  all  of  which  and  more  too  could  be  raised  by  Angler's 
License  Funds  and  dispense  with  the  appropriation.  I  would  have 
an  Angler's  license  applying  to  men  only,  above  the  age  of  twenty-one 
years.  I  would  not  make  that  license  more  than  one  dollar  for  resi- 
dents. Possibly  a  little  higher  for  non-residents.  Then  I  would  have 
it  arranged  so  that  the  proper  officials  of  the  township  or  county 
could  write  in  and  apply  for  exemptions,  certifying  that  certain 
parties  in  that  township  or  county  were  too  poor  to  take  out  licenses 
and  we  would  issue  licenses  free.  I  would  make  the  fee,  as  I  said, 
one  dollar.  After  running  a  year  or  two,  it  is  possible  that  the  fee 
might  be  reduced,  but  I  believe  a  license  on  that  basis  would  give  us 
money  enough  to  establish  these  small  stations  over  the  state  at  the 
rate  of  three,  four  or  five  a  year  and  maintain  them.  I  think  it  would 
increase  the  efficiency  of  the  Fish  Commission  wonderfully  and  it 
would  not  cost  anybody  a  dollar,  only  the  man  that  fished  and  not 
him  if  he  was  a  poor  man  and  could  not  afford  to  pay  it. 

Mr.  Lord :     Mr.  Bower,  how  often  do  you  have  board  meetings  ? 

Mr.  Bower:  The  board  meets  very  irregularly.  No  fixed  time  for  the 
meetings.  It  is  almost  impossible  to  get  them  together. 

Mr.  Lord:     On  an  average,  how  many  meetings  do  they  have  a  year? 

Mr.  Bower:  Not  over  three,  sometimes  only  two.  One  of  the  members 
lives  here  in  Detroit,  one  in  Saginaw  and  one  in  Houghton,  and  it 
is  pretty  hard  for  them  all  to  get  together. 

Mr.  Lord  :     Do  j( >u  have  a  record  of  those  meetings  ? 

Mr.  Bower:     Yes,  sir. 
(Kecord  shown). 

Mr.  Bower :  We  keep  in  pretty  close  touch  with  the  commission  because 
I  make  a  financial  report  every  month  to  each  of  them,  giving  a  cer- 
tified copy  of  the  bank  balance,  and  this  year  I  have  begun  to  make 
a  quarterly  report. 

Mr.  Lord :  I  notice  that  on  the  third  day  of  last  October,  your  treasurer 
had  a  balance  in  his  hands  of  fl 9,457.00. 

Mr.  Bower:     Yes.  sir. 

Mr.  Lord:  Now,  your  meeting  previous  to  that  October  meeting  was 
held  in  May? 

Mr.  Bower:  Yes.  sir.  Of  course,  they  get  together  informally  some- 
times and  we  correspond  more  or  less. 

Mr.  Lord:  Do  they  really  take  an  actual  interest  in  the  work  of  the 
Fish  Commission  or  is  it  really  all  conducted  by  yourself,  as  an 
actual  fact. 

Mr.  Bower:  Well,  very  largely  by  myself.  They  are,  of  course,  non- 
salaried.  It's  really  not  the  fault  of  the  men,  if  there  is  a  fault,  it  is 
with  the  system. 


258 

Mr.  Lord :  Isn't  it  a  fact,  Mr.  Bower,  that  the  board  is  entirely  guided 
by  you? 

Mr.  Bower:  Well,  in  many  instances  they  approve  of  my  recommenda- 
tions and  then  again  they  don't. 

Mr.  Lord:  "Mr.  Bower,  what  is  the  nature  of  the  supplies  of  all  kinds 
that  you  purchase? 

Mr.  Bower :     That  takes  quite  a  wide  range ;  tools  of  all  kinds. 

Mr.  Lord:     What  kind  of  tools? 

Mr.  Bower :  Well,  at  Paris  Station  we  have,  within  the  last  year,  or  two, 
purchased  a  complete  set  of  farmer's  tools  because  there  we  have 
fifteen  or  twenty  tillable  acres  of  land.  This  last  spring  I  directed 
all  the  overseers  at  the  stations  to  raise  all  the  crops  they  could  on 
their  tillable  land. 

Mr.  Lord:  Do  you  purchase  the  agricultural  implements  and  other 
equipment  ? 

Mr.  Bower:  The  local  Superintendents  do  most  of  the  buying.  Some- 
times on  large  matters  like  five  hundred  cans,  I  do  the  buying  myself. 
I  buy  these  cans  of  a  big  can  manufacturing  concern  here  in  Detroit. 

Mr.  Lord:  So  that  you  have  one-half  dozen,  or  more,  men  purchasing 
supplies  for  the  Fish  Commission.  Do  they  buy  from  local  people 
usually  ? 

Mr.  Bower:     To  some  extent. 

Mr.  Lord:     Have  you  ever  made  any  investigation,  as  Superintendent 
of  the  Fish  Commission,  as  to  whether  the  man  doing  the  purchasing* 
is  getting  all  he  should  get  for  the  money  he  is  spending? 

Mr.  Bower:     Very  frequently. 

Mr.  Lord:     Have  you  ever  had  any  occasion  to  criticise? 

Mr.  Bower:  Yes,  in  some  cases  but  I  think  as  a  rule  they  have  done  the 
best  they  could. 

Mr.  Lord :     How  are  they  supplied  with  money  to  make  these  purchases  ? 

Mr.  Bower:  Until  last  year  if  he  bought  with  money  he  furnished  the 
money  himself  but  during  the  last  year  or  two  we  have  made  some 
advances  to  him.  I  think  we  have  about  eight  or  nine  hundred  dol- 
lars out  now  to  the  superintendents  of  various  stations,  including 
myself. 

Mr.  Lord :     Do  you  require  these  men  to  give  any  bonds? 

Mr.  Bower :  No,  sir.  They  make  requisitions  each  month.  All  of  these 
hatchery  purchases  are  made  on  requisitions  with  exception  of  fixed 
charges,  which  include  salary  of  local  superintendents,  my  own 
salary,  office  rent,  telephone  and  lights.  The  rest  are  covered  by 
monthly  requisitions. 

Mr.  Lord :     Do  these  requisitions  come  to  your  office? 

Mr.  Bower:     Yes,  sir. 

Mr.  Lord :  Are  these  requisitions  supposed  to  be  approved  by  one  mem- 
ber of  the  commission  ? 

Mr.  Bower :     Yes ;  the  originals  are  all  approved. 

Mr.  Lord:  There  is  an  item  of  $25.00  for  incidentals  here;  do  they 
have  to  tell  what  they  are? 

Mr.  Bower :  That  is  really  a  mere  order  to  spend  $25.00 ;  they  have  to 
submit  vouchers  for  it.  There  is,  of  course,  lots  of  small  stuff  they 
have  to  have.  We  allow  them  a  small  sum.  The  vouchers  have  to 
be  submitted  for  approval. 


259 

Mr.  Lord :  What  actual  knowledge  do  you  have  that  these  people  need, 
actually  need,  the  stuff  they  are  purchasing  ? 

Mr.  Bower:  We  have  to  have  a  certain  amount  of  confidence  in  our 
men.  Some  of  them  have  been  with  us  twenty-five  years  and  have 
not  broken  that  confidence.  If  they  put  in  items  that  should  not 
be  allowed,  I  talk  with  them ;  great  many  items  have  been  ironed  out 
before  they  are  shown. 

Mr.  O'Brien:     Could  you  trace  out  an  entry  of  incidentals? 

Mr.  Bower:    Y^s — (files  and  vouchers  shown). 

Mr.  Lord :  Do  you  allow  the  overseers  to  make  an  overdraft  on  requisi- 
tions ? 

Mr.  Bower:  We  give  them  a  little  leeway.  These  things  are  estimates, 
some  of  them,  and  some  are  actual  costs. 

Mr.  Lord:  Getting  back  to  the  spawning  proposition.  Do  you  produce 
your  own  fish  entirely? 

Mr.  Bower :  We  sometimes  buy  a  few  brook  trout  and  salmon.  In  fact 
I  have  thought  best,  and  would  now  recommend,  that  we  buy  all  our 
brook  trout  eggs.  The  only  draw-back  is  that  you  couldn't  always 
get  what  you  needs  You  can  buy  them  cheaper  than  producing  them. 
The  main  reason  is  that  the  Eastern  brook  trout  hatcheries  are  rais- 
ing brook  trout  for  the  market,  and  what  they  get  out  of  their  eggs 
is  largely  velvet. 

Mr.  Lord:  You  say  you  can  buy  all  the  eggs  cheaper?  Why  don't  you 
do  that? 

Mr.  Bower:  I  have  recommended  this  to  the  board,  but  they  are  in 
doubt  as  to  getting  them. 

Mr.  Lord :     How  much  would  you  save  if  you  did  buy  them  ? 

Mr.  Bower :  For  instance,  we  would  save  at  Harrietta  the  cost  of  plant- 
ing brook  trout  the  year  around. 

Mr.  Lord:     About  how  much? 

Mr.  Bower:  I  think  we  could  save  at  that  one  hatchery  $2,000.00  a 
year. 

Mr.  Lord:     And  how  much  could  you  save  at  the  other  hatcheries? 

Mr.  Bower:  We  could  save  about  the  same  proportion  at  hatcheries 
where  we  use  brook  trout  eggs. 

Mr.  Lord:    Eight  or  ten  thousand  dollars  in  the  aggregate? 

Mr.  Bower :  No,  I  should  say  about  $5,000.00  a  year  provided  we  bought 
all  the  brook  trout  eggs ;  that  might  be  a  little  high. 

Mr.  Lord :     Could  you  also  buy  your  other  spawn  to  advantage  ? 

Mr.  Bower:  No,  there  is  no  place  where  it  is  produced.  We  would 
not  save  $5,000.00  a  year  for  this  reason ;  because  at  the  Soo  we  now 
buy  all  our  brook  trout  eggs,  and  some  at  the  Paris  station.  I  think 
it  would  be  safe  to  say  that  we  could  save  from  three  to  four  thou- 
sand dollars  a  year. 

Mr.  Lord :  Can  you  tell  us  about  how  many  privately  owned  hatcheries 
there  are  in  the  state  ? 

Mr.  Bower:  Yes,  sir.  There  is  a  private  hatchery  near  Evart  owned 
by  Mr.  Postal's  nephew  of  LeRoy,  Michigan;  W.  H.  Fray  of  Sand 
Lake  has  one,  and  I  think  there  are  from  fifteen  to  twenty  privately 
owned  hatcheries  in  the  state. 

Mr.  Hinkley:  The  1915  legislature  appropriated  a  certain  amount  to 
be  used  for  investigating  sites.  What  was  done  about  that?  Did 
the  Commission  make  any  recommendations? 


260 

Mr.  Bower:     I  don't  know,  but  I  do  not  think  they  did. 

Mr.  Lord :  In  order  to  complete  our  record  about  your  board  meetings, 
I  want  to  ask  a  few  questions.  Your  record  shows  that  from  August 
4th,  1915,  to  October  4th,  1917,  Commissioner  Hunsinger  attended 
six  meetings  only;  Mr.  Postal,  five  meetings,  and  Mr.  Mann  only  two 
meetings  in  over  two  years. 

Mr.  Bower:  That  record  is  correct;  but,  of  course,  as  I  say,  Mr.  Huns- 
inger and  Mr.  Postal  get  together  informally. 

Mr.  Lord :  Although  Mr.  Postal  lives  in  Detroit,  Mr.  Hunsinger  has 
attended  more  meetings  than  he.  Mr.  Mann  has  paid  no  attention 
to  it,  having  attended  only  two  meetings  in  over  two  years. 

Mr.  Bower:  They  correspond  quite  frequently  and  monthly  reports  are 
sent  to  them.  The  meetings  used  to  be  held  more  frequently. 

Mr.  Lord :  You  have  had  just  six  meetings  during  that  time  and  Mr. 
Hunsinger  has  attended  every  meeting. 

None  of  these  records  are  signed  by  anybody  except  yourself.  Why  is 
it  that  the  board  has  not  signed  the  records;  haven't  the  minutes 
been  approved  by  the  board? 

Mr.  Bower:  Yes,  all  have  been  approved;  just  overlooked  the  signing, 
I  suppose. 


MICHIGAN    HISTORICAL    COMMISSION 

Mr.  Lord:  Mr.  Fuller,  you  are  the  Secretary  of  the  Michigan  Histor- 
ical Commission? 

Dr.  Fuller:     Yes,  sir. 

Mr.  Lord:  Will  vou  state,  in  a  general  way,  what  the  activities  of  the 
commission  are? 

Dr.  Fuller:  The  fundamental  activity  is  collecting  and  publishing 
materials  on  Michigan  history. 

Mr.  Lord:  Putting  it  MS  briefly  as  possible,  tell  us  something  about  the 
nature  of  these  collections  and  publications. 

Dr.  Fuller:  That  is  quite  a  long  story.  I  perhaps  might  say  that  we 
have  a  set  of  collections,  39  volumes ;  the  first  volume  was  published 
in  1877  by  the  Michigan  Pioneer  and  Historical  Association;  they 
have  been  continued  by  the  commission  since  the  association  was 
discontinued,  but  they  are  now  distinctly  documentary.  Heretofore, 
the  collections  have  consisted  of  a  great  variety  of  materials  which 
have  been  distributed  to  the  schools.  There  is,  however,  a  great  deal 
of  the  material  that  could  not  be  used  by  the  schools,  and  so  the  idea 
was  to  distribute  the  material  in  some  way  so  that  it  could  be  more 
wisely  sent  about.  The  documents  now  go  to  colleges,  universities 
and  public  libraries.  We  have  now  taken  the  papers  read  at  the 
meetings  of  the  Pioneer  Society  which  used  to  appear  in  the  docu- 
ments, and  we  publish  them  in  the  Michigan  Historical  Magazine; 
these  documents  and  the  magazine  are  the  two  fundamental  publi- 
cations. 

Mr.  Lord:     What  is  the  cost  of  publishing  these  every  year? 

Dr.  Fuller:     About  fifty  cents  a  volume. 

Mr.  Lord :     How  manv  do  you  publish  ? 

Dr.  Fuller:     2,500. 

Mr.  Lord:    Do  you  dispose  of  all  of  them? 


261 

Dr.  Fuller :  Yes,  sir.  We  have  a  regular  mailing  list  and  send  the 
volumes  out  just  as  soon  as  possible.  We  have  2,000  on  our  perma- 
nent mailing  list,  schools,  libraries,  etc.  We  sell  the  volumes  to  indi- 
viduals that  desire  them  at  a  cost  of  f  1.00. 

Mr.  Lord:     Do  you  sell  many? 

Dr.  Fuller :  We  don't  try  to  because  they  are  more  valuable  in  libraries 
and  schools. 

Mr.  Lord:     How  many  of  these  annual  reports  have  you  on  hand  now? 

Dr.  Fuller:  Thirty-nine  volumes  of  those  plus  one  volume  of  the  new 
University  series. 

Mr.  Lord:  I  mean,  Mr.  Fuller,  the  number  of  copies  of  these  volumes 
that  you  have  on  hand  now. 

Dr.  Fuller:  I  couldn't  give  it  to  you  definitely.  Those  volumes  were 
kept  over  in  the  House  and  Senate  store  room  and  Charles  Pierce 
had  them  taken  down  to  the  Oakland  Building,  and  they  were  all  put 
in  there  without  counting. 

Mr.  Lord:  Well,  those  have  been  hanging  around  the  Capitol  for  many 
years,  so  they  could  not  all  have  been  disposed  of. 

Dr.  I  uller :  No.  22  and  No.  27  are  out  of  print,  and  they  should  not  be 
disposed  of  entirely  until  the  right  places  are  found  to  put  them  in. 

Mr.  Thompson :  Is  it  advisable,  Mr.  Fuller,  to  make  a  larger  number  of 
these  books  than  you  would  use  ordinarily? 

Dr.  Fuller:  We  have  calls  for  them  constantly;  we  have  immediate 
demands  for  2,000,  and  we  print  500  more  while  the  type  is  set.  It 
costs  very  little  more  to  print  the  500  extra. 

Mr.  Lord :     Where  does  the  demand  for  the  extra  copies  come  from  ? 

Dr.  Fuller:  From  Michigan  libraries  that  have  been  overlooked  in  the 
original  distribution,  and  public  schools,  principally  high  schools, 
that  had  not  received  them  before. 

Mr.  Lord:  Do  you  issue  any  pamphlets  now,  other  than  the  one  you 
sent  to  us? 

Dr.  Fuller:  Once  on  a  while  a  serial  bulletin.  That  is  a  little  venture 
the  commission  undertook  to  encourage  children  to  study  Michigan 
history.  We  have  published  eight  of  those  bulletins ;  No.  9  is  in  press 
now  and  contains  prize  stories;  No.  10  will  be  a  bulletin  for  Mrs. 
Ferry's  use  with  clubs,  etc.  The  point  in  publishing  them  separately 
is  so  that  they  can  be  in  handy  form  for  special  use;  probably  not 
more  than  one  or  two  will  be  published  a  year. 

Mr.  Lord:  You  can't  tell  us  approximately  how  many  sets  of  volumes 
you  have  in  the  Oakland  Building  ? 

Dr.  Fuller :  I  should  think  there  might  be  two  hundred  sets,  thirty-nine 
volumes  in  a  set. 

Mr.  Lord:     So  that  there  is  really  about  eight  thousand  books? 

Dr.  Fuller :     Yes,  but  undoubtedly  those  will  be  taken  up. 

Mr.  Lord:     Have  you  always  published  twenty-five  hundred  volumes? 

Dr.  Fuller :     That  has  been  the  maximum  for  a  long  time. 

Mr.  Lord:  Now,  the  publication  of  those  last  year  cost  f 2,076.86,  pub- 
lications altogether. 

Dr.  Fuller:  I  believe  Mr.  Munson  reported  to  the  Senate  committee 
when  I  was  present  that  the  cost  was  approximately  -13,000.00  for 
our  publications.  We  would  print  very  much  more  than  that  if  we 
could.  Our  limitation  is  from  two  directions ;  in  the  first  place,  state 


262 

printers,  and  second,  the  size  of  our  staff.  The  purpose  of  bur  com- 
mission is  to  place  before  the  people  Michigan  history  and  in  a  way 
that  they  can  best  use  it. 

Mr.  Lord:  Yon  spoke  of  a  mailing  list;  tell  ns  about  the  mailing  list 
you  have.  Are  they  principally  the  same  people  every  year  that  you 
send  to? 

Dr.  Fuller:  Yes,  the  public  libraries  of  Michigan,  the  public  schools  of 
Michigan,  principally  high  schools,  colleges  and  university,  and  in- 
stitutions in  other  states  where  we  get  value  received  in  the  way  of 
exchanges. 

Mr.  Lord:     Do  you  send  those  by  mail  or  express? 

Dr.  Fuller:     The  sets  go  freight  and  single  volumes  by  parcels  post. 

Mr.  Lord:     That  accounts  for  your  heavy  postage  bill? 

Mr.  Fuller:     Yes,  sit. 

Mr.  Lord:     Do  yon  use  the  addressograph  in  addressing  wrappers? 

Dr.  Fuller:  Yes,  Lampson  does  our  work  on  the  addressograph. 

Mr.  Lord:     What  does  it  cost? 

Dr.  Fuller:  The  cost  varies,  figures  up  a  great  deal  less  than  if  we  did 
them  by  typewriter;  the  plates  cost  us  2l/2  cents  apiece  and  they 
are,  of  course,  all  made  up  now. 

Mr.  Lord:  Did  you  ever  make  any  effort  to  get  the  addressograph  that 
the  state  owns,  and  do  your  own  work? 

Dr.  Fuller:     I  could  buy  Lampson's  for  about  f 40.00. 

Mr.  Lord:  Well,  the  state  owns  two  of  these  at  the  present  time;  one 
in  the  Board  of  Health  and  one  in  the  Public  Instruction  Depart- 
ment, and  they  are  not  in  use  all  the  time. 

Dr.  Fuller:  Well,  we  have  simply  turned  our  mailing  proposition  over 
to  Lampson. 

Dr.  Fuller:     What  does  Lampson  charge  for  addressing  envelopes? 

Dr.  Fuller:  It  depends  on  the  mailing.  Our  books  are  all  wrapped,  and 
he  does  the  wrapping  and  ties  and  stamps  and  addresses  the  whole 
job. 

Mr.  Lord:     How  much  does  that  cost  a  year? 

Dr.  Fuller:  Mailing  of  seven  hundred  volumes  for  the  first  series  cost 
us  $4.50;  that  means  wrapping  and  stamping  and  doing  everything; 
going  and  getting  them,  addressing  them  and  carrying  to  the  post- 
office.  It  cost  us  fo.OO  to  mail  2,500  copies  of  the  Fourth  Annual 
Report,  that  is  the  handling  of  the  entire  thing  from  the  bindery. 

Mr.  Lord:  Now,  in  the  statement  that  you  have  in  your  report,  it  is 
somewhat  misleading,  for  the  reason  that  you  have  no  statement 
whatever  of  the  amounts  that  you  have  drawn  from  the  general  fund, 
only  from  your  special  appropriation.  The  people  of  the  state  would 
think  that  it  only  cost  the  state  |5,028J)4  for  this  commission, 
whereas  the  cost  was  really  between  nine  and  ten  thousand  dollars. 

Dr.  Fuller:  That  is  very  true,  and  I  brought  it  up  before  the  commis- 
sion at  the  first  meeting  and  their  direction  was  to  make  it  this 
way;  also  the  Governor  said  that  it  was  alright.  Of  course,  it 
wouldn't  occur  again  because  we  are  now  entirely  on  appropriation. 

Mr.  Lord:     How  much  did  you  get  last  year? 

Dr.  Fuller:     $15,000.00  last  year. 

Mr.  Lord:  What  new  activities  are  you  engaging  in  to  make  the  addi- 
tional appropriation  necessary? 


263 

Dr.  Fuller:  Additional  publishing  and  collecting,  archives,  the  making 
of  biography  of  Michigan ;  and  for  instance,  we  had  a  man  here  that 
worked  all  summer  in  the  Archives  Department  and  it  cost  us  about 
f 300.  He  was,  or  is  now,  a  member  of  the  faculty  at  Ann  Arbor,  and 
of  course  the  work  of  collecting  is  a  work  upon  which  you  can  spend 
any  amount  of  money.  Wisconsin  spends  every  year  $80,000.00, 
Iowa  160,000.00,  and  Illinois  $40,000.00.  There  isn't  a  state  in  the 
whole  northwest  that  spends  as  little  as  we  do.  We  are  at  least  forty 
years  behind  Wisconsin. 

Mr.  Lord:  Do  you  think,  Dr.  Fuller,  that  your  work  here  is  of  real 
benefit  to  the  people  of  the  state? 

Dr.  Fuller:  I  can  best  answer  your  question  in  this  way.  The  people 
of  Michigan  have  instituted  a  university  which  has  a  department 
of  history,  for  the  training  of  students  in  the  study  and  research  in 
history.  The  head  of  that  department  is  Prof.  Van  Tyne,  a  man  who 
is  a  writer  and  scholar  known  internationally;  and  a  man  like  Bur- 
ton of  Detroit,  who  spent  thirty  years  in  collecting  certain  materials ; 
Jenks  of  Port  Huron,  Attorney ;  O'Brien  of  Kalamazoo,  perhaps  the 
best  known  man  on  ecclesiastical  history,  especially  in  the  Catholic 
church ;  Clements,  Regent  of  the  University,  and  L.  T.  Hemans,  who 
was  a  member  of  the  commission  before  his  death ;  if  men  like  these 
can  spend  time,  without  pay,  it  is  my  idea  that  it  is  a  very  high 
endorsement  of  the  work  and  it  would  indicate  that  there  is  some- 
thing in  historical  study. 

On  the  other  hand,  the  states  about  us,  the  states  we  look  up  to  for 
ideas,  the  eastern  states,  they  all  began  this  work  many  years  ago 
and  have  gone  away  on  in  advance  of  anything  we  have  or  can  have 
for  many  years;  the  states  all  around  us,  particularly  Wisconsin, 
Illinois,  Minnesota,  Indiana  and  Iowa,  have  all  gone  ahead  of  us— 
Ohio  is  broken  up  because  they  could  not  get  together  in  the  work. 
Now,  when  you  get  over  into  Canada,  that  is  so  far  away  from  us 
because  they  have  the  record  office  in  back  of  them — as  formed  in 
England. 

Mr.  Lord :     What  use  do  you  make  of  the  reports  that  are  sent  to  you  ? 

Dr.  Fuller :     We  publish  whatever  is  worthy  of  publication. 

Mr.  Thompson :  What  means  have  you  for  knowing  that  this  informa- 
tion is  all  accurate  and  true? 

Dr.  Fuller :  We,  of  course,  do  not  have  any.  We  cannot  actually  check 
up  every  item,  but  the  best  thing  we  can  do  is  to  send  it  to  some 
man  with  good  historical  judgment  and  ask  him  to  check  the  work 
for  us. 

Mr.  Lord :     The  question  is,  how  many  people  read  these  publications? 

Dr.  Fuller:  Well,  they  are  used  in  most  of  the  leading  city  libraries, 
city  schools  and  many  of  the  rural  schools. 

Mr.  Thompson  :  What  is  there  of  actual  value  to  the  community  ?  Have 
you  any  knowledge  as  to  whether  they  are  actually  read  and  studied 
J)y  pupils  of  the  schools  ? 

Mr.  "Fuller :  We  had  last  year  at  the  Historical  meeting  a  talk  on  that 
very  thing,  made  by  Mr.  Cody.  He  sent  out  a  questionnaire  and  the 
conclusion  he  reached  was  that  these  volumes  were  not  useful  for  the 
public  schools,  and  for  that  very  reason  we  discontinued  that  collec- 
tion ;  there  was  no  use  in  sending  it  out  to  schools.  It  has  been,  as  I 


264 

said,  discontinued  in  the  form  of  one,  and  is  broken  np  in  two  series, 
documentary  series  and  university  series. 

You  can't  go  on  with  this  sort  of  thing  if  the  people  are  not  inter- 
ested. Now,  if  it  isn't  of  any  value,  I  want  to  get  out  of  it.  If  it  has 
value,  we  have  got  to  convince  the  people  of  its  value. 

Mr.  Lord:  Of  what  value  are  the  various  biographies  to  a  school,  for 
instance  ? 

Dr.  Fuller:  I  think  it  is  one  of  the  most  important  studies  for  young- 
sters. You  take  the  life  of  such  a  man  as  General  Shafter.  I  presume 
few  know  that  he  lived  down  in  Kalamazoo  county.  The  value  of  it 
is  in  the  inspiration  that  it  gives  to  the  youngsters.  Of  course,  there 
are  various  ways  of  writing  biographies,  one  that  simply  tells  names, 
dates,  etc.,  is  of  no  value  whatever,  but  one  that  interprets  the  life  of 
the  man,  the  obstacles  he  met  with  and  overcame,  etc.,  is  a  very 
valuable  thing. 

Another  thing,  I  believe  that  there  ought  to  be  in  all  high  schools  a 
course  of  American  History  and  at  least  a  few  weeks  of  Michigan 
History,  so  that  the  students  would  know  the  leading  lines  of  develop- 
ment in  their  own  state. 


SUPERINTENDENT  OF  CAPITOL 

Mr.  Lord :    Mr.  Bennett,  you  are  the  Superintendent  of  the  Capitol  and 

Capitol  Grounds? 
Mr.  Bennett:     Yes,  sir. 
Mr.  Lord:    Will  you  state  to  the  Commission,  as  briefly  as  possible, 

what  your  duties  are? 
Mr.  Bennett:     Well,  the  duties  are  looking  after  the  Capitol  Building, 

the  State  Offices  outside  of  the  building,  and  the  grounds. 
Mr.  Lord :     You  have  supervision  of  all  the  office  buildings,  and  all  lands 

owned  by  the  state  in  the  city  of  Lansing? 
Mr.  Bennett:     No,  I  could  hardly  say  that,  for  I  don't  have  supervision 

over  the  School  for  the  Blind  and  Industrial  School  grounds;  just 

the  Capitol  grounds  and  two  blocks  owned  by  the  state  here  in 

Lansing. 

Mr.  Lord:     What  are  the  activities  connected  with  that  supervision? 
Mr.  Bennett:     I  try  to  visit  the  different  offices  as  often  as  possible, 

o.  k.  the  bills  for  purchases  of  furniture,  carpets  and  supplies,  except 

those  contracted  for  by  the  Board  of  Auditors. 
Mr.  Lord :     Do  you  do  the  purchasing  of  furniture,  carpets,  etc.  ? 
Mr.  Bennett:     I  am  supposed  to;  once  in  a  while  the  department  head 

goes  off  and  purchases  some  unknown  to  me. 
Mr.  Lord:    Was  there  an  order  issued,  do  you  know,  or  a  resolution 

passed  by  the  Board  of  State  Auditors,  authorizing  you  to  do  this 

purchasing,  or  where  do  you  get  your  authority  ? 
Mr.  Bennett :     I  can't  recall  about  that ;  whether  there  has  been  an  order 

or  resolution  by  the  Board  of  Auditors,  I  couldn't  say  at  present. 

But  I  know  that  a  requisition  is  supposed  to  be  made  on  the  Board 

of  Auditors  and,  if  for  material  of  any  kind,  it  is  almost  always 

turned  over  to  me  to  purchase,  even  if  the  board  isn't  in  session. 
Mr.  Lord :    When  an  office  orders  a  new  desk,  they  are  required  to  make 


265 

a  requisition  to  the  Board  of  State  Auditors,  and  then  that  requisi- 
tion is  passed  on  by  the  board  and  referred  to  you  to  make  the  pur- 
chase ? 

Mr.  Bennett :     Yes,  sir. 

Mr.  Lord:  Did  you  receive  any  instructions  from  the  Board  of  State 
Auditors,  at  any  time,  that  you  were  to  make  all  these  purchases  of 
furniture  for  all  these  offices  ? 

Mr.  Bennett:  I  couldn't  say  as  to  that,  really.  I  don't  know  whether 
there  is  a  resolution  on  record  of  that  kind  or  not ;  there  is  a  general 
understanding  that  requisitions  come  before  the  board  and,  if  the 
board  isn't  in  session,  the  secretary  turns  them  over  to  me  to  act  on 
in  many  cases. 

Mr.  Lord:  So  that,  so  far  as  you  know,  it  is  rather  a  "hit  and  miss" 
proposition,  sometimes  the  requisitions  are  referred  to  you  and  some- 
times they  are  not. 

Mr.  Bennett:     Yes,  that's  true. 

Mr.  Lord :  Do  you  keep  a  record  of  all  the  purchases  you  make  in  your 
office? 

Mr.  Bennett :  Yes,  and  a  record  of  some  I  don't  make.  For  instance,  if 
a  bill  goes  through  for  material  I  have  not  purchased,  they  won't 
pass  it  unless  my  o.  k.  is  on  same. 

Mr.  Lord :  What  is  the  object  of  their  asking  for  your  o.  k.  when  you 
don't  make  the  purchase  ? 

Mr.  Bennett :     Don't  just  know,  except  for  record  purposes. 

Mr.  Lord :  Mr.  Bennett,  from  whom  do  you  usually  purchase  the  furni- 
ture and  through  whom  ?  Do  you  go  to  the  factories  where  you  can 
make  purchases  yourself,  or  do  you  get  bids? 

Mr.  Bennett :  I  generally  have  an  understanding  with  some  local  dealer 
here  in  Lansing  who  will  give  me  the  best  discount,  and  purchase 
from  him. 

Mr.  Lord:     Have  you  ever  tried  any  other  dealers  outside  of  Lansing? 

Mr.  Bennett :  Oh,  yes.  I  have  got  now  so  I  know  just  about  what  the 
wholesale  price  of  the  goods  should  be  and  find  it  more  satisfactory 
to  buy  here  through  a  dealer.  If  I  buy  outside,  the  goods  are,  of 
course,  just  delivered  to  the  station ;  and  we  have  to  attend  to  getting 
them  to  the  offices,  and  oftentimes  they  are  liable  to  be  marred  or 
broken  and  need  some  fixing.  If  I  buy  from  the  dealer  here,  they 
are  delivered  to  the  offices,  unpacked  and  in  good  order.  If  they  are 
marred  or  need  a  little  fixing  the  local  dealer  attends  to  that. 

Mr.  Lord :     Have  you  ever  tried  to  buy  direct  from  the  factory  ? 

Mr.  Bennett:     No,  I  never  have. 

Mr.  Lord :  Did  you  ever  visit  any  of  the  furniture  factories  in  Grand 
Rapids  and  see  what  you  could  do  there? 

Mr.  Bennett:  Yes,  I  have  visited  them  but  not  to  make  any  purchases 
or  anything  of  that  kind. 

Mr.  Lord :  The  Board  of  Auditors  have  not  restricted  you,  have  they  ? 
You  would  have  authority  to  go  to  the  factory  and  purchase  these 
articles,  wouldn't  you? 

Mr.  Bennett:  The  only  thing  would  be  that  I  would  not  like  to  incur 
any  traveling  expenses  without  the  board's  approval. 

Mr.  Lord :  You  are  a  member  and  attend  the  meetings  of  the  Michigan 
Institutional  Buyers'  Association.  Do  you  purchase  anything  at  all 
on  recommendation  of  that  association? 


266 

Mr.  Bennett:  Sometimes.  For  instance,  some  supplies  such  as  elec- 
trical bulbs,  etc.  They  have  never  taken  up  the  matter  of  carpets, 
furniture,  etc.,  which  is  my  biggest  line. 

Mr.  Lord :  Can  you  tell  us  approximately  the  aggregate  amount  of  your 
purchases  for  the  last  fiscal  year  ? 

Mr.  Bennett :     I  could  by  looking  at  my  books. 

Mr.  Lord :  We  would  like  to  know  the  aggregate  amount  you  have  pur- 
chased through  your  department  for  the  last  fiscal  year. 

Mr.  Bennett:  There  possibly  are  some  accounts  that  have  come  direct 
that  I  did  not  purchase.  Sometimes  they  go  ahead  and  purchase 
without  putting  through  the  requisition  until  after  the  purchase  is 
made. 

Mr.  Lord  :  Then,  there  really  is  no  uniform  system  of  state  purchases  as 
far  as  state  departments  are  concerned.  They  often  purchase  with- 
out your  knowledge? 

Mr.  Bennett :     Not  entirely  so.     There  are  cases  where  it  has  been  done. 

Mr.  Lord :  Can  you  think  of  any  system  whereby  money  could  be  saved 
in  the  matter  of  purchasing  this  kind  of  furniture?  Can  you  see  any 
way  by  which  the  state  could  be  saved  any  considerable  amount  of 
money  by  any  other  system  of  purchasing  for  state  departments, 
such  as  carpets,  furnkure,  etc.? 

Mr.  Bennett :  If  there  was  a  system  whereby  the  purchases  of  the  whole 
State  of  Michigan  were  combined,  you  might  get  a  saving. 

Mr.  Lord:  Don't  you  think  that  money  could  be  saved  by  dealing  direct 
with  the  manufacturers  ? 

Mr.  Bennett :  I  don't  think  so.  I'll  tell  you,  Mr.  Lord,  there  are  many 
cases  where  a  person  wants  furniture  and  wants  it  immediately,  and 
I  am  compelled  to  pay  a  bigger  price  than  I  would  have  to  if  I  had 
more  time.  They  want  it  immediately  and  I  am  obliged  to  go  and 
buy  from  stock  on  hand. 

Mr.  Lord:  Surely  there  could  be  a  better  system  than  that  adopted. 
Departments  should  advise  you  in  advance  of  their  needs.  They 
usually  can  tell  a  short  time  before  if  they  are  going  to  need  a  desk 
or  anything  like  that,  can't  they  ? 

Mr.  Bennett:     I  can't  say  as  to  that. 

Mr.  Lord:  How  much  have  you  bought  recently?  Can  you  tell  us 
approximately? 

Mr.  Bennett:  No,  that  would  be  quite  a  problem  to  tell.  I  presume 
that  in  the  last  four  months  I  have  bought  f 5,000.00  worth  of  car- 
pets and  furniture. 

Mr.  Lord:  On  an  average,  about  how  much  do  you  buy  during  the 
year?  $15,000.00  worth? 

Mr.  Bennett:  Well,  I  wouldn't  like  to  be  recorded.  I  could  give  you 
nearly  the  exact  amount,  I  will  send  the  figures  to  you. 

Mr.  Lord:  Do  you  keep  an  inventory  of  the  properties  owned  by  the 
state  ? 

Mr.  Bennett:  I  think  the  Board  of  Auditors  have  an  inventory;  they 
keep  track  of  that  themselves. 

Mr.  Lord :  Do  you  know  whether  they  go  around  in  the  various  offices 
and  check  up  the  furniture,  etc.? 

Mr.  Bennett:  I  think  so.  As  far  back  as  when  Mr.  McCoy  was  state 
treasurer,  in  1901,  he  had  an  inventory  taken  of  state  property.  I 


267 

know  they  have  a  man  that  goes  around  and  puts  marks  on  all  prop- 
erty bought  now. 

Mr.  Lord :  Have  you  ever  had  any  inventory  except  the  one  made  by 
Mr.  McCoy? 

Mr.  Bennett:     No. 

Mr.  Lord :  As  a  matter  of  fact,  you  don't  know  if  there  is  one  in  the 
capitol  or  not? 

Mr.  Bennett:     No,  I  don't  know. 

Mr.  Lord  :  Shouldn't  it  be  the  duty  of  the  Superintendent  of  the  Capitol 
to  keep  the  inventory  and  to  take  one  every  year? 

Mr.  Bennett :  Well,  the  superintendent  is  just  working  under  the  Board 
of  Auditors  and  if  they  keep  track  of  it— 

Mr.  Lord:     Don't  you  think  it  should  be  his  duty  to  do  that? 

Mr.  Bennett :  Don't  know  of  any  reason  why  it  should,  any  more  than 
the  Board  of  Auditors.  I  might  find  a  mark  on  that  chair  and  I 
might  not.  It  might  belong  to  the  Senate  or  House  of  Representa- 
tives. The  Board  of  Auditors  might  not  have  any  record  that  they 
had  bought  any  chairs  for  this  committee  room.  There  is  an  inven- 
tory taken  of  the  Senate  property,  but  it  is  done  by  the  Sergeant-at- 
Arms  of  the  House  and  Senate.  A  copy  of  that  is  supposed  to  be 
turned  over  to  me.  J  don't  think  I  had  a  copy  at  the  last  session. 

Mr.  Lord :  So  as  a  matter  of  fact,  various  people  have  to  do  with  the 
purchases  of  furniture,  carpets,  etc.,  and  different  persons  take  an 
inventory  of  the  furniture  and  other  property? 

Mr.  Bennett :     We  have  not  anything  entirely  uniform  about  it. 

Mr.  Lord :  Don't  you  tiring  it  would  be  better  if  we  did  have  some 
uniformity  ? 

Mr.  Bennett:    Possibly. 

Mr.  Lord :  Don't  you  think  it  would  be  better  if  the  superintendent  of 
the  capitol  had  charge  of  all  this,  and  thus  the  responsibility  be 
placed  in  one  man? 

Mr.  Bennett:  Possibly  it  might  be;  but  I  can  see  how  the  Board  of 
Auditors,  I  suppose,  think  they  have  a  pretty  good  system  in  taking 
care  of  it. 

Mr.  Lord :  Do  you  make  any  purchases  of  anything  outside  of  furniture, 
carpets,  soap,  towels,  etc. 

Mr.  Bennett :     You  mean  office  supplies  ? 

Mr.  Lord :     Yes,  any  supplies  at  all  used  by  the  departments. 

Mr.  Bennett :  I  don't  purchase  much  like  that.  Sometimes  a  requisi- 
tion goes  through  the  Board  of  Auditors  for  something  special  and 
then  I  purchase  it. 

Mr.  Lord :     Where  do  you  buy  those  things  ? 

Mr.  Bennett:  No  place  in  particular.  Wherever  I  think  I  can  get  tjie 
best  goods  for  little  money. 

Mr.  Lord  :     How  do  you  buy  soap  ? 

Mr.  Bennett:     From  wholesalers  and  manufacturers. 

Mr.  Lord :     Can  you  tell  us  the  kind  of  materials  and  furniture  you  buy  ? 

Mr.  Bennett:  Carpets,  linoleum,  tables,  chairs,  desks,  steel  stuff,  not 
only  filing  cases,  but  steel  shelving,  and  things  like  that. 

Mr.  Lord :     Do  you  buy  much  lumber  ? 

Mr.  Bennett:     Why,  anything  we  need  by  way  of  lumber. 

Mr.  Lord :     Where  do  you  buy  that  ? 


268 

Mr.  Bennett :     Here  in  the  lumber  yards. 

Mr.  Lord :     Do  you  buy  very  much  ? 

Mr.  Bennett :  No,  I  shouldn't  call  it  very  much. 

Mr.  Lord:     Do  you  advertise  for  bids  on  your  boxes? 

Mr.  Bennett :     I  generally  get  a  list  of  what  I  need  and  go  direct  to  the 

different  lumber  companies  here  in  Lansing.    We  have  tried  outside 

firms,  but  it  is  quite  a  bulky  proposition.     I  have  been  buying  the 

legislature's  boxes  for  the  last  two  years  here  in  Lansing.     I  buy 

them  in  the  knock-down  for  45  cents  and  it  would  cost  from  $1.25  to 

$2.00  to  buy  them  made  up  now. 

Mr.  Lord:     Who  authorizes  the  purchase  of  those  boxes? 
Mr.  Bennett :     The  Secretary  of  State. 
Mr.  Lord :     So  that  some  purchases  are  made  without  requisition  to  the 

Board  of  Auditors? 
Mr.  Bennett :     In  gome  cases  where  I  know  material  is  needed,  I  look  to 

see  what  I  can  get,  and  if  the  price  is  satisfactory  I  buy  it,  and 

make  a  requisition  afterwards. 
Mr.  Lord :     How  much  during  the  year  do  you  suppose  you  purchase  in 

that  way,  the  aggregate  amount  in  money,  I  mean? 
Mr.  Bennett:     I  couldn't  say. 
Mr.  Lord :     Do  you  buy  $1,000.00  worth  a  year? 
Mr.  Bennett:     Possibly.     It  is  rather  indefinite  and  would  be  hard  to 

find  out.     We  buy  some  things  that  we  never  make  requisitions  for. 
Mr.  Lord:     That  is,  you  never  turn  in  a  requisition  after  you  make  the 

purchases  ? 
Mr.  Bennett:     For  instance,  if  the  electrician  should  come  to  me  for 

100  or  1,000  feet  of  wire  and  say  he  needed  it  for  repairs,  etc.,  and 

needed  it  immediately,  why  you  couldn't  very  well  ask  him  to  wait  to 

get  a  requisition  through. 

Mr.  Lord:     Do  you  keep  electrical  supplies  on  hand  at  all? 
Mr.  Bennett:     We  are  supposed  to  keep  a  certain  amount  on  hand;  we 

get  most  of  that  stuff  right  here  in  town  as  we  can  do  just  as  well 

on  it,  but  if  I  am  offered  any  better  prices,  I  don't  hesitate  to  buy 

in  advance  of  our  needs.     That  would  be  another  case  where  I  would, 

or  might,  file  a  requisition  after  purchase. 

Mr.  Lord :     Do  you  have  a  stock  room  for  supplies  you  keep  on  hand  ? 
Mr.  Bennett :     A  small  stock  room. 
Mr.  Lord:    What  record  do  you  keep  of  the  material  and  supplies  in 

that  stock  room  ? 
Mr.  Bennett:     No  particular  record.     We  have  what  we  call  special 

requisitions  and  if  it  was  for  soap,  for  instance,  they  would  send  it 

in  to  me. 

Mr.  Lord :     What  would  you  do  with  that  requisition  ? 
Mr.  Bennett:     File  it  away;  I  have  a  file  for  requisitions. 
Mr.  Lord :     Do  you  make  any  book  entry  of  it  ? 
Mr.  Bennett :     No  book  entry  at  all. 

Mr.  Lord :     Do  you  take  an  inventory  of  your  stock  room  every  year  ? 
Mr.  Bennett:     No. 
Mr.  Lord :     Don't  you  know  at  the  end  of  every  year  what  you  have 

given  out  ? 

Mr.  Bennett :     No,  simply  what — 
Mr.  Lord:     What  records  do  you  keep  of  purchases  you  make,  and  of 

requisitions  you  get? 


269 

Mr.  Bennett :     We  enter  all  on  the  book. 

Mr.  Lord:     What  kind  of  book? 

Mr.  Bennett:  A  regular  book  we  have  there,  in  which  we  enter  every- 
thing as  it  is  purchased  and  when  the  bills  come  in,  I  o.  k.  them. 

Mr.  Lord :  Do  you  have  any  book  entry  of  amounts  purchased,  the  cost 
of  same,  etc.  ? 

Mr.  Bennett:  Yes;  everything  is  in  black  and  white,  showing  what  it 
costs. 

Mr.  Lord :  You  don't  keep  any  stock  account  against  any  of  the  depart- 
ments, do  you? 

Mr.  Bennett:  No,  but  our  book  shows  to  what  departments  the  stuff 
went. 

Mr.  Lord:  What  improvements  do  you  think  could  be  made  in  the 
present  system  of  purchasing? 

Mr.  Bennett:  Why,  if,  as  you  suggested  a  little  while  ago,  everything 
should  come  through  one  head,  I  think  it  would  be  an  improvement. 

Mr.  Lord:  You  think  you  would  get  better  results  and  also  get 
materials  cheaper? 

Mr.  Bennett:  I  think  you  couldn't  help  but  get  some  of  the  stuff 
cheaper. 

Mr.  Lord:  You  don't  have  anything  to  do  whatever  with  purchase  for 
state  institutions,  do  you? 

Mr.  Bennett:     No. 

Mr.  Lord  :     What  purchases  do  you  make  for  the  legislature,  any  at  all  ? 

Mr.  Bennett:  Why,  no,  although  I  do  supply  the  legislature  sometimes 
with  a  good  deal  of  small  stuff,  the  same  as  I  do  the  departments. 
For  instance,  the  Industrial  Accident  Board  have  a  fund  and  they 
are  supposed  to  live  within  that  fund.  They  might  want  some  little 
thing  that  I  had ;  for  instance,  a  half  dozen  electric  bulbs,  and  if  they 
were  compelled  to  go  down  town  and  buy  them,  they  could  not  buy 
them  for  less  than  list  price  and  I  could  buy  them  for  31%  off. 
Things  of  that  kind  I  turn  over  to  them  without  any  record. 

Mr.  Lord :  How  long  has  this  present  system  been  in  force,  for  the 
Superintendent  of  the  Capitol  to  make  purchases  of  carpets,  furni- 
ture, etc.  ? 

Mr.  Bennett:  I  think  it  is  the  growing  tendency  to  have  it  go  to  one 
head.  I  think  my  purchases  are  better  than  if  Tom,  Dick  or  Harry 
had  made  the  purchases. 

Mr.  Lord:  Isn't  it  a  fact  that,  until  recently,  every  department  of  the 
state  government  made  its  own  purchases,  to  a  great  extent  ? 

Mr.  Bennett :     Yes,  I  think  largely  that  is  true. 

Mr.  Lord:  So  that,  evidently,  the  Board  of  Auditors  thought  it  would 
be  an  improvement  to  have  one  man  make  the  purchases,  and  at  the 
same  time  the  board  has  not  insisted  that  one  man  make  all  the  pur- 
chases; it  has  permitted  some  departments  to  make  their  own  pur- 
chases at  various  times,  without  any  requisitions? 

Mr.  Bennett:     Yes,  sir. 

Mr.  Lord :     What  steps  do  you  take  to  know  that  the  bills  are  o.  k.  ? 

Mr.  Bennett:  If  a  bill  comes  to  me  from  a  member  of  the  Board  of 
Auditors,  I  don't  take  very  many  steps  unless  I  know  that  the 
amount  charged  is  too  much.  For  instance,  a  bill  came  to  me  the 
other  day  from  the  Superintendent  of  Public  Instruction.  It  was 


270 

o.  k.'d  when  it  came  to  me  and  I  went  back  and  asked  about  the  bill, 
as  it  was  20  to  25  per  cent  too  high.  The  girl  in  his  office  said  that 
she  had  o.  k.'d  it;  that  she  knew  the  stuff  had  been  received,  but  that 
if  the  bill  was  not  correct,  they,  of  course,  did  not  want  to  pay  it.  It 
was  simply  a  question  of  discount.  The  firm  they  bought  of  was 
giving  25%  off  and  I  could  get  40%  off.  I  took  it  up  with  the  people 
they  bought  from,  and  after  a  while  they  said  they  would  give  us 
40%  off,  so  that  it  resulted  in  a  saving  of  f  30.00  to  $60.00  in  that  par- 
ticular case. 

Mr.  Lord :  Do  you  refer  now  to  the  new  furniture  bought  for  the  Super- 
intendent of  Public  Instruction? 

Mr.  Bennett:     It  was  some  furniture  bought  for  that  department. 

Mr.  Lord:  You  say  the  original  discount  was  25' .{  and  you  gol  it 
increased  to  40%  ? 

Mr.  Bennett:     Yes,  sir. 

Mr.  Lord:  Are  you  quite  sure  that  the  bill  was  settled  on  a  40%  dis- 
count basis? 

Mr.  Bennett:  I  am  sure  because  I  o.  k.'d  it  after  the  discount  was  on 
the  bill  and  I  put  it  through  the  Board  of  Auditors. 
Stowell-David  Company  of  Grand  Rapids  had  quite  a  bit  of  talk  with 
Mr.  Ellsworth  of  the  Insurance  Department  trying  to  get  him  to  buy 
their  line  of  furniture;  they  even  had  a  large  cut  made  showing  him 
how  nice  his  office  would  look.  They  took  the  matter  up  with  me, 
and  DeKline  was  with  them,  i  then-  local  dealer).  I  said  to  him, 
"Why  is  it,  I  can't  get  as  much  discount  from  you  as  from  other 
concerns?"  They  said  that  their  goods  were  better  goods,  and  all 
this  and  that.  I  told  them  I  couldn't  look  at  the  furniture  as  I  could 
buy  cheaper  elsewhere.  They  were  only  allowing  25%  discount  and 
I  could  get  40%.  Then  they  said,  "If  you  will  buy  all  your  furniture 
of  us,  we  will  give  you  40%  discount."  I  told  him  that  I  would  buy 
nothing  of  him  if  he  didn't  give  me  40 %  off  and  that  if  he  did,  he 
would  stand  as  good  a  chance  as  anybody  else.  I  got  the  40%  off, 
except  on  steel  stuff,  and  better  on  chairs.  I  got  the  chairs  for  10% 
increase  over  cost. 

Mr.  Lord:  Do  you  buy  any  furniture  through  Allen  &  DeKline,  the 
local  dealers  here? 

Mr.  Bennett:  Sometimes  a  party  will  send  in  a  requisition  for  a  filing 
case  or  something  that  they  want  to  match,  something  they  have 
previously  bought  from  them,  and,  in  such  cases,  I  do  sometimes 
send  the  order  to  them. 

Mr.  Lord  :     They  get  a  commission,  of  course,  for  such  sales  ? 

Mr.  Bennett:     Yes,  sir. 

Mr.  Lord:  That  commission  would  be  saved  if  you  bought  direct  from 
the  manufacturer,  wouldn't  it? 

Mr.  Bennett:  I  figure  that  I  can  do  as  well  buying  from  parties  that 
deliver  the  goods  here  in  the  building.  They  pay  the  freight  and 
stand  ready  to  make  good  if  the  goods  are  not  in  good  condition 
when  they  arrive.  I  believe  it  is  a  better  proposition  than  to  buy 
direct  from  the  factory  and  save  10%. 

Mr.  Lord :  Don't  you  think,  Mr.  Bennett,  that  a  contract  could  be  made 
with  some  big  furniture  manufacturer  in  Grand  Rapids,  or  elsewhere,, 


271 

to  supply  the  state  departments  with  the  various  articles  of  furni- 
ture purchased  by  the  state? 

Mr.  Bennett:  Well,  what  are  you  going  to  do?  There  is  hardly  two 
offices  that  want  the  same  line  of  goods. 

Mr.  Lord :  Well,  they  may  not  want  the  same  line  of  goods,  but  couldn't 
there  be  sort  of  a  standardization  of  furniture  for  the  various 
offices? 

Mr.  Bennett :  If  you  can  bring  that  about,  possibly  a  deal  could  be  made. 
As  it  is  now,  out  of  a  dozen  requisitions,  there  may  be  eight  different 
lines  of  goods.  They  simply  refuse  to  make  the  deal  unless  they  have 
what  they  want.  I  had  a  requisition  for  a  safe  cabinet  from  the 
Securities  Commission,  for  instance,  and  it  was  made  on  the  Kala- 
mazoo  firm  that  the  state  contracts  a  good  deal  with.  I  took  the 
matter  up  with  the  firm  in  Kalamazoo  and  their  terms  were  5%  off  if 
you  paid  the  account  before  the  10th  of  the  month.  There  is  another 
firm  just  as  good,  and  in  some  respects  I  like  it  better,  which  will  give 
me  20%  off.  I  told  them  this  and  after  a  good  deal  of  correspondence 
they  met  the  competition.  A  few  days  ago 'the  Board  of  Auditors  got 
word  from  them  that  the  safe  was  in  Kalamazoo,  ready  to  be  shipped, 
but  that  they  couldn't  sell  it  for  the  price  we  asked,  and  could  only 
allow  us  5%.  If  I  had  the  say,  I  would  tell  them  to  cancel  the  order. 
I  went  over  to  the  secretary  of  the  Securities  Commission  and  told 
him  about  the  deal  and  that  the  Art  Metal  Company  made  as  good 
a  safe,  etc.  After  talking  with  him,  I  told  the  Board  of  Auditors  to 
cancel  the  order.  We  thought  we  would  give  them  a  little  leeway  and 
wait  a  few  days,  as  this  safe  was  all  ready  for  prompt  delivery,  and 
I  wrote  to  them  that  it  was  up  to  them,  as  we  didn't  want  to  buy 
the  safe  at  that  price.  I  expect  the  Art  Metal  Company  man  will  be 
here  this  week,  when  I  shall  give  him  the  specifications  and  undoubt- 
edly buy  of  him. 

Mr.  Lord :  As  a  matter  of  fact,  Mr.  Bennett,  the  Board  of  Auditors  per- 
mits the  Securities  Commission  or  any  other  department  to  go 
ahead  and  make  its  own  purchases,  does  it? 

Mr.  Bennett :  There  are  some  departments  that  make  their  own  pur- 
chases and  I  guess  the  Board  of  Auditors,  in  some  cases,  allow  the 
bills  for  them. 

Mr.  O'Brien :  Is  it  your  observation,  Mr.  Superintendent,  that  the  pur- 
chases that  are  made  without  requisition,  are  made  by  the  depart- 
ments who  are  represented  on  this  Board  of  Auditors? 

Mr.  Bennett:  No,  not  altogether.  All  the  departments  have  the  same 
privilege.  It  is  supposed  that  they  do  not  make  purchases  in  that 
way,  but  they  sometimes  do. 

Mr.  Thompson :     How  long  have  you  been  here,  Mr.  Bennett  ? 

Mr.  Bennett:  I  came  here  in  1901  originally,  but  I  was  out  for  about 
eighteen  or  twenty  months,  two  or  three  years  ago. 

Mr.  Thompson:     You  started  in  as  superintendent? 

Mr.  Bennett:     Yes,  sir. 

Mr.  Lord :  Who  has  charge  of  the  vacant  land  in  and  around  the  capitol 
owned  by  the  state? 

Mr.  Bennett :  It  is  under  my  charge,  all  but  two  lots,  which  were  turned 
over  to  the  city  for  parks. 


272 

Mr.  Lord:  Have  you,  or  anybody  else,  to  your  knowledge,  made  any 
effort  to  standardize  equipment  used  by  the  state  departments  ? 

Mr.  Bennett:     No,  I  don't  think  so. 

Mr.  Lord:  If  the  State  Board  of  Auditors  had  a  uniform  purchasing 
system,  it  would  be  a  great  improvement,  wouldn't  it? 

Mr.  Bennett:     Yes,  sir. 

Mr.  Lord:  Do  you  keep  any  track,  Mr.  Bennett,  of  the  furniture  or 
equipment  in  the  various  departments  of  the  state? 

Mr.  Bennett:  As  I  say,  I  think  there  is  a  record  in  the  office  of  the 
Board  of  Auditors.  I  don't  have  any  system  myself,  and  I  presume 
the  record  is  incomplete  along  this  line. 

Mr.  Lord :     Do  you  make  any  reports  to  the  Board  of  Auditors  ? 

Mr.  Bennett :  I  make  reports  to  them  of  stuff  that  I  sell.  I  don't  specify 
from  what  office  it  came.  For  instance,  Mr.  Fuller  might  have  some- 
thing that  he  does  not  need  or  want.  I  do  with  it  what  I  think  best. 
I  may  sell  it  or  turn  it  over  to  some  other  department,  but,  now  to 
follow  right  back,  I  don't  think  you  would  find  a  record  in  the  office 
of  the  Board  of  Auditors  that  those  things  had  been  discarded. 

Mr.  Lord:  When  you  sell  junk  and  stuff  of  that  kind,  what  do  you  do 
with  the  cash  you  receive  ? 

Mr.  Bennett:  Turn  it  over  to  the  State  Treasurer  and  report  to  the 
Board  of  Auditors  as  to  what  I  have  sold. 

Mr.  Lord  :     What  does  that  report  consist  of,  prices  received,  etc.  ? 

Mr.  Bennett:  For  a  number  of  years  I  simply  turned  over  the  cash  I 
received  for  those  things,  but,  I  think  it  was  during  Osborn's  admin- 
istration, I  thought  I  was  getting  so  much  money  that  I  should  keep 
a  record  of  it,  so  I  took  it  up  with  Mr.  Hamilton,  the  accountant,  and 
we  got  a  system  of  receipts  whereby  I  am  protected.  It  is  the  tripli- 
cate receipt  system.  When  a  man  buys  any  furniture,  or  anything  of 
that  kind,  and  pays  me  for  it,  I  give  him  a  copy  of  the  receipt,  keep 
a  copy  and  turn  the  other  copy  over  to  the  Board  of  Auditors  when 
I  send  in  my  monthly  report. 

Mr.  Thompson :  Mr.  Bennett,  the  capitol  police  are  under  your  control, 
are  they  not? 

Mr.  Bennett:     Yes,  sir. 

Mr.  Thompson :  Have  you  established  any  unit  of  work  for  your  people ; 
how  do  you  tell  whether  one  of  your  employes  is  doing  enough  work 
or  not? 

Mr.  Bennett :  Well,  we  watch  them  pretty  closely.  Most  of  our 
employes  have  a  certain  amount  of  work  to  do  and  they  have  to  do 
that.  We  have  five  or  six  men  on  our  payroll  that  we  call  "utility" 
men.  For  instance,  if  a  janitor  in  some  department  is  absent,  we 
supply  one  of  these  utility  men.  Sometimes  they  work  hard  and 
some  overtime.  Sometimes,  of  course,  it  is  a  little  slack. 

Mr.  Thompson:  How  do  you  determine  whether  you  should  put  one 
janitor  or  two  on  a  certain  job  ? 

Mr.  Bennett :  That  is  sort  of  settled  by  the  Board  of  Auditors  and  the 
department  requiring  the  janitor  services.  Take  Mr.  Fuller's  depart- 
ment; he  has  had  three  janitors  until  lately,  but  now  has  only  two. 

Mr.  Thompson:  Tell  us,  Mr.  Bennett,  whether  you  make  any  effort  to 
determine  whether  one  man  could  do  the  work  or  whether  it  would 
require  two  men  in  any  certain  place. 


273 

Mr.  Bennett:  The  trouble  with  the  janitor  work  is  that  they  can't  go 
into  a  department  and  do  the  janitor  work  while  the  office  force  is 
working.  It  has  to  be  done  early  and  late.  Also,  some  of  .the 
department  janitors  are  partly  on  my  payroll  and  partly  on  their 
payroll.  They  do  the  janitor  work  and  then  do  odd  jobs  for  the 
department  during  the  rest  of  their  time. 

Mr.  Thompson :  You  talked  about  boxes  and  about  buying  them.  Would 
it  be  economical  to  buy  those  boxes  from  the  Marquette  State  Prison  ? 

Mr.  Bennett:  Not  unless  they  could  be  sent  down  here  in  the  knock- 
down. The  trouble  is,  they  don't  know  just  the  stock  size  they  are 
going  to  use  here  each  year. 

Mr.  Thompson :     Do  you  have  any  standard  size  of  boxes  that  you  use  ? 

Mr.  Bennett:     No. 

Mr.  Thompson:     Isn't  there  any  way  that  could  be  arranged? 

Mr.  Bennett :  I  don't  think  so.  We  have  a  lot  of  small  boxes  here  now 
that  were  ordered  in  the  knock-down  some  years  ago. 

Mr.  Thompson:     You  haven't  any  demand  for  boxes  of  that  size? 

Mr.  Bennett:     No. 

Mr.  Thompson:  What  survey,  or  examinations,  are  made  as  to  fire  risk 
in  the  Capitol ;  by  experts,  I  mean  ? 

Mr.  Bennett:  Well,  there  has  been  some  experts  around  to  look  the 
proposition  over. 

Mr.  Thompson:  Can  you  remember  when  the  last  examination  was 
made? 

Mr.  Bennett:  I  think  that  was  done  when  I  was  away  two  or  three 
years  ago. 

Mr.  Thompson:     Do  you  know  who  did  it? 

Mr.  Bennett :  No,  I  do  not.  There  was  a  report  and  when  I  looked  for 
it,  I  couldn't  find  it  again. 

Mr.  Thompson :  Is  there  anybody  who  makes  it  his  business,  besides 
yourself,  to  watch  for  increase  of  fire  risk  here? 

Mr.  Bennett:  Why,  I  don't  know  that  there  is.  I  know  I  am  fighting 
the  proposition  all  the  time  to  keep  down  the  fire  risk.  We  have 
moved  lots  of  stuff  out  of  the  attic  and  had  it  put  in  other  places. 
Also,  ever  since  the  war,  I  have  hired  two  extra  watchmen  and 
they  parole  the  outside  of  the  building  nights.  I  have  arranged  for 
extra  lights  to  light  the  corners  of  the  building.  Take  it  inside,  we 
have  six  regular  watchmen,  who  are  working,  practically,  eight-hour 
shifts.  I  might  say  that  there  are  eight  of  them  because  there  are 
two  in  the  basement  acting  as  watchmen.  Also,  we  have  a  man  in 
the  Treasurer's  department  who  locks  himself  in  at  8  o'clock  in  the 
evening  and  stays  there  until  6  or  7  in  the  morning.  Practically 
nine  men  inside  the  building  and  two  men  outside.  They  have 
watchmen's  clocks  that  they  have  to  visit  every  hour,  excepting  those 
in  the  basement,  .who  visit  them  every  half  hour. 

Mr.  Lord:     What  disposition  is  made  of  your  waste  paper? 

Mr.  Bennett:     It  is  sold. 

Mr.  Lord:  Who  sells  it? 

Mr.  Bennett:     I  do. 

Mr.  Lord:  How  much  paper  did  you  sell  last  year  and  what  did  you 
receive  for  it? 


274 

Mr.  Bennett :     I  should  think  off-hand  from  fifteen  hundred  to  two  thou- 
sand dollars  worth  of  waste  paper  and  books. 
Mr.  Lord:     Do  you  sell  it  here  in  Lansing? 
Mr.  Bennett :     Yes.    I  think  I  get  more  for  it  than  I  would  by  sending  it 

away  to  paper  mills. 

Mr.  Lord :    How  much  a  hundred  weight  do  you  get  for  it  ? 
Mr.  Bennett:     Last  year  for  common  paper,  $16.00  a  ton  is  as  much  as  I 

got;  book  paper,  f  34.00  a  ton;  but  I  am  getting  only  $10.00  and 

$16.00  now. 

Mr.  Lord :     Can  you  tell  us  what  percentage  of  your  sales  Was  books  ? 
Mr.  Bennett :     Possibly  one-half. 
Mr.  Lord :     Do  you  sell  lots  of  Public  Acts  ? 
Mr.  Bennett:     There  was  a  bunch  of  Public  Acts  sold. 
Mr.  Lord:    What  is  the  nature  of  the  books  you   sell,   departmental 

reports  ? 
Mr.  Bennett:     Not  so  many  of  those;  they  have  those  figured  down 

pretty  fine. 
Mr.  Lord:     Can  you  tell  us  anything  about  reports  and  old  documents 

of  various  kinds  that  are  stored  now  in  the  Capitol  Building? 
Mr.  Bennett:     Well,  there  are  quite  a  good  many  of  those  stored  around 

here. 

Mr.  Lord:     Are  they  used  at  all? 
Mr.  Bennett:     Yes,  sir. 
Mr.  Lord :     Where  are  they  stored  ? 
Mr.  Bennett:     Up  in  the  attic,  the  fourth  floor  and  the  basement.    We 

have  the  new  Compiled  Laws  stored  down  town. 

Mr.  Lord:     Who  and  what  are  the  duties  of  the  Assistant  Superin- 
tendent? 
Mr.  Bennett:     William  Hoffman.    He  looks  after  the  workmen,  gets  the 

bills  ready  for  the  Superintendent's  o.  k. ;  gets  the  pay  roll  ready,  etc. 
Mr.  Lord :     Are  these  employes  engaged  by  yourself,  Mr.  Bennett  ? 
Mr.  Bennett:     Very  few  of  them. 
Mr.  Lord:     Who  are  they  hired  by? 
Mr.  Bennett:     The  Board  of  Auditors  hires  most  of  them,  practically 

all  of  them. 
Mr.  Lord :     Do  you  really  need  all  of  these  employes  ?    Do  you  think  they 

are  all  necessary  and  essential? 

Mr.  Bennett :     I  think  I  really  ought  to  have  more  directly  under  me. 
Mr.  Lord :     Do  you  think  that  you  really  need  all  of  these  men  ? 
Mr.  Bennett:     That  is  a  wide  question.    For  instance,  the  Secretary  of 

State  has  two  janitors  on  my  pay  roll.     It  might  not  be  necessary 

for  me  to  pay  the  amount  I  pay  to  do  the  janitor  work,  in  the  office, 

but  the  men  are  earning  the  money  by  doing  work  in  the  department 

other  than  janitor  work.    The  Secretary  of  State's  office  keeps  them 

busy  the  balance  of  their  time. 
Mr.  Lord:     What  do  you  pay  the  janitors  in  the  Secretary  of  State's 

office? 
Mr.  Bennett :     Mr.  Bosch  gets  $75.00  a  month  and  the  other  one  $1,000.00 

a  year.     I  don't  think  either  one  of  those  get  anything  more  from 

the  Secretary  of  State. 
Mr.  Lord :     What  really  constitutes  the  duties  of  these  janitors ;  that  is, 

the  janitors  under  your  direct  supervision? 


275 

Mr.  Bennett :     Well,  they  are  supposed  to  keep  the  various  rooms  clean. 

They  do  this  in  the  morning  and  in  the  evening. 
Mr.  Lord:     How  many  hours  do  they  work  a  day? 
Mr.  Bennett:     They  are  on  deck  nearly  all  the  time.     They  very  often 

have  to  come  earlier,  but  their  regular  hours  are  from  7  to  5. 
Mr.  Lord:     What  do  they  do  when  the  offices  are  filled  with  clerks? 
Mr.  Bennett:     Down  in  the  Secretary  of   State's  office  they  work  at 

packing,  etc. 

Mr.  Lord:     What  are  the  duties  of  the  hall  janitors? 
Mr.  Bennett :     The  hall  janitors  keep  the  halls  clean,  mop  the  floors,  etc. 

Some  of  them  work  from  7  to  5  and  some  from  6  to  5.    These  men 

get  11,000.00  a  year. 

Mr.  Lord :     How  long  have  they  been  getting  that  salary  ? 
Mr.  Bennett :     Not  so  very  long ;  they  were  raised  some  time  in  May. 
Mr.  Lord :     What  about  the  rest  of  these  men  on  your  pay  roll  ? 
Mr.  Bennett:     Some  of  them  are  utility  men,  and  I  think  are  the  most 

valuable  men  we  have.     They  fill  vacancies.     You  know  that  under 

the  law,  every  man  is  entitled  to  one  month  off  during  the  year,  so 

that  we  have  to  fill  these  vacancies  caused  by  vacations  and  sickness. 
Mr.  Lord :     Do  you  think  the  period  of  vacation  is  too  much  ? 
Mr.  Bennett :     Our  legislature  didn't  think  so.    I  thought  the  law  was  a 

little  stiff  at  the  time  they  made  it,  but  of  late  years,  especially  since 

the  war  began,  I  think  the  laboring  man  is  getting  the  poor  end  of 

the  deal.    A  good  many,  of  the  men  utilize  their  vacation  to  earn  a 

little  on  the  side. 

Mr.  Lord:     What  do  you  think  of  their  salary? 
Mr.  Bennett :     I  thought  it  was  a  fair  salary  to  pay  them,  although  the 

board  put  it  up  to  me  when  the  janitors  asked  for  an  increase  in 

salary. 

Mr.  Lord :     Do  you  know  of  any  corporation  in  Lansing,  or  in  any  Mich- 
igan city,  which  gives  its  employes  twenty-four  days  a  year  vacation, 

with  pay? 

Mr.  Bennett:     I  don't  know  of  any. 

Mr.  Lord:     Isn't  it  usually  two  weeks'  vacation  they  get? 
Mr.  Bennett:     I  think  so. 
Mr.  Lord:     What  do  you  do  in  the  matter  of  sickness?     Is  it  charged 

up  against  the  vacation  or  do  they  get  sick  leave  in  addition  to 

regular  vacation. 
Mr.  Bennett:     It  is  charged  up  unless  the  Board  of  Auditors  directs 

otherwise  in  special  cases. 
Mr.  Lord  :     How  about  the  janitor  in  the  Board  of  Health  ?  Do  they  pay 

him  a  little  extra  ?     He  is  down  for  |75.00  a  month  on  your  payroll. 
Mr.  Bennett :     I  think  they  do. 
Mr.  Lord :     How  much  ? 

Mr.  Bennett :     Enough  to  make  him  f  1,000.00  a  year,  I  believe. 
Mr.  Lord:     Mr.  LaVaque  is  janitor  for  the  State  Library;  isn't  he  also 

on  their  payroll  in  addition  to  being  on  yours? 
Mr.  Bennett:     The  fact  of  that  matter  is  that  he  goes  there  and  works 

nights  and  they  pay  him  for  that.     It  is  extra  work  and  extra  hours. 

Guess  he  is  a  good  man  and  he  stays  in  the  Law  Library  nights  or 

evenings  at  the  request  of  some  of  the  judges  of  the  Supreme  Court. 

I  think  he  gets  $25.00  a  month  for  that. 


276 

Mr.  Lord :  All  these  men  on  the  roll  for  $60.00  and  f 75.00  a  month  are 
men  who  also  are  on  payrolls  of  the  various  departments  in  which 
they  are  located? 

Mr.  Bennett:     With  one  or  two  exceptions,  yes. 

Mr.  Lord :     How  about  the  janitress  of  the  ladies'  room  ? 

Mr.  Bennett:  She  gets  fl, 000.00  a  year;  her  salary  was  increased  a 
month  or  so  ago. 

Mr.  Lord:  What  work  does  your  painter  have  to  do?  Does  he  attend 
to  all  the  painting  in  the  State  Capitol  ? 

Mr.  Bennett :  There  are  cases  where  they  go  outside  for  painters,  where 
they  want  fine  decorating  done. 

Mr.  Lord :     How  about  your  carpenter  ? 

Mr.  Bennett:  He  is  the  best  man  on  the  payroll.  He  is  surely  a  good 
man  and  does  all  the  repair  work. 

Mr.  Lord :  How  about  the  watchmen  or  policemen ;  you  have  twelve  all 
told? 

Mr.  Bennett:  What  we  call  policemen  includes  two  men  outside  and 
the  man  in  the  Treasurer's  office  and  men  in  the  buildnig.  They  are 
all  included  in  that  bunch. 

Mr.  Lord:     How  many  have  you  in  the  Capitol  Building  itself? 

Mr.  Bennett:  There  are  nine  of  them  that  put  in  more  or  less  time;  in 
fact  they  put  in  all  their  time. 

Mr.  Lord:     How  do  you  arrange  their  work? 

Mr.  Bennett:  The  men  that  go  on  from  seven  in  the  morning  until  four 
in  the  afternoon  have  a  little  longer  shift  than  the  others.  There 
was  a  little  strife  about  the  men  not  wanting  to  go  on  the  night  or 
midnight  shift  and  stay  until  morning,  so  we  changed  the  hours  and 
put  them  on  from  midnight  until  seven  in  the  morning,  so  that  the 
men  coming  on  in  the  morning  get  the  extra  hour.  We  have  three 
who  work  from  seven  to  four,  three  from  four  to  twelve,  and  three 
from  twelve — midnight — to  seven  in  the  morning. 

Mr.  Lord:     What  constitutes  their  duties? 

Mr.  Bennett:  They  watch  the  building;  the  day  men  show  visitors 
around  and  those  that  come  on  later,  of  course,  look  out  for  fire 
risk,  etc.  In  the  basement,  the  two  men  that  stay  there  show  the 
war  relics,  etc. 

Mr.  Lord :     Do  you  think  all  these  men  are  necessary  for  that  work  ? 

Mr.  Bennett:  Well,  it  is  just  a  question  of  the  safety  of  the  building 
and  showing  the  people  around.  I  never  thought  the  two  men  in  the 
basement  were  of  much  use  except  to  show  relics.  You  have  to  have 
two  men  because  one  man  has  to  be  relieved  for  dinner,  etc. 

Mr.  Lord:     I  notice  that  you  have  a  janitress  at  $30.00  a  month? 

Mr.  Bennett:  Well,  she  takes  care  of  the  judges'  room  in  the  Capitol 
National  Bank  Building,  Judges  Ostrander  and  Stone.  She  does 
that  work  in  the  evenings. 

Mr.  Lord :     What  other  laborers  do  you  have  and  what  do  they  do  ? 

Mr.  Bennett :  We  have  four  now  and  may  have  to  increase  the  number 
when  the  snow  comes  on.  They  keep  the  walks  clean  and  do  odd  jobs 
around  the  grounds. 

Mr.  Lord:     I  also  notice  that  you  have  an  engineer.     What  does  he  do? 

Mr.  Bennett :     He  looks  after  the  steam  plant,  heating  apparatus,  etc. 

Mr.  Lord:     You  don't  use  the  steam  plant,  do  you? 


277 

Mr.  Bennett:  When  you  have  pipes  that  have  been  in  the  building  as 
long  as  these  have,  you  really  have  to  have  someone  to  look  after 
them. 

Mr.  Lord :  If  you  were  given  authority  to  hire  the  janitors  for  the  vari- 
ous offices,  outside  of  the  State  Capitol,  would  you  hire  as  many? 

Mr.  Bennett :  The  janitor  work  could  be  done  with  less  men,  certainly. 
I  could  hire  quite  a  number  less  men  and  keep  it  clean,  but  I  couldn't 
hire  the  messengers  for  the  other  departments. 

Mr.  Lord:  Don't  you  think  it  would  be  a  much  better  plan  if  you  were 
given  entire  charge  of  that  work,  and  let  the  departments  look  after 
their  own  work  ? 

Mr.  Bennett:  It  is  barely  possible  that  they  might  work  one  of  these 
men  where  they  otherwise  would  have  to  put  in  a  man  at  full  pay. 

Mr.  Lord:  Under  the  present  system  there  is  no  uniformity  in  the 
hiring  of  these  men? 

Mr.  Bennett:     No,  nothing  uniform  about  that. 

Mr.  Lord :     What  do  you  know  about  the  various  offices  the  state  rents  ? 

Mr.  Bennett :     I  rent  the  offices  for  them. 

Mr.  Lord:  Can  you  tell  us  off-hand  how  much  rent  we  pay  for  offices 
located  outside  the  Capitol  Building? 

Mr.  Bennett :     About  f  25,000.00  a  year. 

Mr.  Lord:     How  many  offices  does  the  state  rent  down  town? 

Mr.  Bennett :     Oh,  offices  in.  how  many  buildings  ? 

Mr.  Lord:  I  mean,  how  many  departments  are  located  outside  of  the 
Capitol? 

Mr.  Bennett :     I  should  say  about  thirty. 

Mr.  Lord:  You  don't  have  anything  to  do  with  the  offices  rented  out- 
side of  Lansing  for  the  Labor  and  Dairy  and  Food  Departments, 
do  you? 

Mr.  Bennett:     No,  sir. 

Mr.  Lord :  So  that  they  pay  for  their  outside  offices  in  addition  to  the 
$25,000.00  a  year.  The  chances  are,  then,  that  the  total  rent  would 
be  between  $30,000.00  and  $40,000.00. 


INDEX 


TABLE  OF  CONTENTS 

Page 

Why  a  Budget  System 3-12 

Uniform  Accounting 13-16 

State  Purchasing 15-22 

State  Printing > 22-24 

State  Institutions' 24-27 

Industrial  School  for  Boys 24-25 

State  Prison,  Jackson 25-26 

College  of  Mines -26 

University  of  Michigan 26-27 

State  Normal  Schools -27 

Farms -27 

State  Departments 27-30 

Statutory  Changes 30-37 

Dairy  and  Food  Activities -30 

Deeds  to  State  Property 

Examination  of  State  Lands -31 

Game  Laws 31-32 

Michigan  Fish  Commission -32 

Securities  Commission 

Highway  Department  Activities 

Banking  Department  Activities 

State  Tax  Commission -34 

Advisory  Board  in  the  Matter  of  Pardons -34 

State  Auditing 34-35 

Consolidation  of  Offices 35-37 

Proposed  Law  Providing  for  a  Budget  System 

Proposed  Law  Providing  for  a  Uniform  Accounting  System 43-46 

Statistical  Tables 47-57 

Comparative  Statement  of  the  Assessed  Valuation  and  Taxes  Levied 

1912-1917 -47 

Comparative  Statement  Showing  the  Salaries  and  Expenses  of,  and 
the  Average  Number  of  Persons  Employed  in,  the  Several  De- 
partments of  State  Government  for  the  Fiscal  Years  Ending 

June  30,  1908  and  1917 48-49 

Comparative  Statement  Showing  Salaries  Paid  Elective  State  Officers 
in  Michigan  and  in  Other  States  Having  Population  Nearest 

Equal  to  that  of  Michigan -50 

Comparative  Statement  Showing  Salaries  Paid  Deputies  and  Secre- 
taries of  the  Various  State  Departments  for  the  Years  1908  and 

1918 -51 

Comparative  Statement  Showing  the  Costs  for  1908  and  1917  of  the 
Principal  Departments  of  the  State  Government,  Together  with 

the  Per  Cent  of  Increase  or  Decrease -51 

Comparative  Statement  Relating  to  State  Hospitals  and  Charitable 

Institutions -52 

Comparative  Statement  Relating  to  State  Educational  Institutions. .  -53 
Amounts  Paid  for  Services  of  Architects  for  the  Five  Year  Period 
Ending  June  30,  1917.     Also  Amount  Paid  for  Services  of  Archi- 
tects for  the  Fiscal  Year  Ending  June  30,  1917 -54 

List  of  Books,  Reports,  Bulletins,  Etc.,  Printed  by  and  Under  Direc- 
tion of  the  Various  Departments  of  the  State  Government 55-57 


280 

4 

Page 

Stenographic  Report  of  Examination  of  State  Offices 58-277 

Auditor  General's  Department 

Department  of  State 73-85 

Treasurer's  Office 

Superintendent  of  Public  Instruction 90-97 

State  Highway  Department 97-106 

Board  of  State  Auditors 106-120 

Michigan  Securities  Commission 120-129 

Public  Domain  Commission 129-138 

Commissioner  of  Insurance 138-145 

Commissioner  of  Labor 145-15J 

Commissioner  of  Banking 151-156 

Food  and  Drug  Commissioner 156-167 

Game,  Fish  and  Forest  Fire  Commissioner 168-181 

State  Library 181-186 

State  Oil  Inspector 187-195 

State  Board  of  Health 195-204 

State  Tax  Commission 205-216 

Michigan  Railroad  Commission 216-224 

Industrial  Accident  Board 225-237 

Board  of  Corrections  and  Charities 237-245 

Advisory  Board  in  the  Matter  of  Pardons 245-247 

Michigan  Fish  Commission 247-260 

Michigan  Historical  Commission 260-264 

Superintendent  of  Capitol 264-277 


TU   64764 


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UNIVERSITY  OF  CALIFORNIA  LIBRARY 


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